MANILA: China iron ore dropped for a fourth straight session and coking coal hit a four-month low on Wednesday on prospects of weaker demand and easing supply concerns for the steelmaking materials in the world’s biggest steel producer.
The most-traded iron ore for January delivery on China’s Dalian Commodity Exchange was down 0.2% at 543 yuan ($85.00) a tonne by 0330 GMT.
On the Singapore Exchange, iron ore’s front-month December contract slipped 0.5% to $88.65 a tonne after a 1.2% gain in the previous session.
A modest weekly decline of 1.5 million tonnes in iron ore arrivals at Chinese ports should provide temporary support to prices, Atilla Widnell, managing director at Singapore-based Navigate Commodities, said in a note.
“Thereafter, attention will turn to the estimated 1.1 million tonnes week-on-week growth in Aussie and Brazilian iron ore shipments and inflating Chinese portside stocks,” he said.
Imported iron ore stocked at Chinese ports swelled to 147.60 million tonnes last week, the highest since April 2019, Steel Home consultancy data showed.
Benchmark 62%-grade iron ore’s spot price in China stood at $91 a tonne on Tuesday, hovering near an 18-month low of $90 hit the day before.
Dalian coking coal slumped as much as 4.6% to its lowest level since July 15, but coke rose 1.5% after a three-session sell-off.
China’s October coal production jumped 4% on an annual basis and is still rising, a National Development and Reform Commission official said on Tuesday, assuring stable supply.
Construction steel rebar on the Shanghai Futures Exchange slipped 0.5%, while hot-rolled coil shed 0.9%. Stainless steel gained 0.2%.
“We expect China’s national (steel) supply and demand balance will continue to loosen given that seasonally-affected construction steel consumption will weaken further over the next couple of months,” Widnell said.
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