Dalian iron ore off 1-week high as supply outlook improves
- The steelmaking ingredient's most-active September contract on the Singapore Exchange fell 3.1% to $143.50 a tonne, after a 9.1% advance in the previous session
Dalian iron ore edged higher in a choppy Wednesday session, while the Singapore benchmark slumped 3%, underlining fragile sentiment as improved supply prospects could add pressure on prices that have collapsed due to weak Chinese demand.
Iron ore's most-traded January 2022 contract on China's Dalian Commodity Exchange climbed 2% to 803.50 yuan a tonne, but slipped from 829 yuan, its highest since Aug. 18 - a level scaled earlier in the session.
The steelmaking ingredient's most-active September contract on the Singapore Exchange fell 3.1% to $143.50 a tonne, after a 9.1% advance in the previous session.
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Spot iron ore also rebounded on Tuesday, rallying to $147.50 a tonne from a more than eight-month low of $140.50, SteelHome consultancy data showed, as demand concerns somewhat eased.
China's steel production controls amid an intensified de-carbonisation drive and renewed COVID-19 curbs weighed heavily on iron ore in recent weeks.
Prices have fallen more than 30% from the record peaks in May, and a further drop was possible, according to analysts Erik Hedbord and Richard Lu at commodities consultancy CRU.
"CRU forecasts iron ore prices to decline further towards the end of the year, as we see a more balanced market with Chinese demand likely to stabilise for the rest of the year, while seaborne supply continues to improve," they said in their latest market insight.
Iron ore producers in Australia, the biggest supplier to top steel producer China, have been struggling to keep production elevated, though the analysts said shipment volumes usually improve in the last quarter.
But hey ruled out a price slump below $100 a tonne, citing a still-tight market.
Dalian coking coal and coke scaled record peaks for a third day, rising 3% and 3.2%, respectively, on supply concerns.
Construction steel rebar on the Shanghai Futures Exchange gained 1.3%, while hot-rolled coil and stainless steel both climbed 0.9%.
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