MANILA: Dalian and Singapore iron ore futures fell on Tuesday in volatile trade, as traders tempered their optimism about prospects of top steel producer China moving further away from its stringent zero-Covid policy.
The most-traded iron ore for May delivery on China’s Dalian Commodity Exchange ended morning trade 1.2% lower at 775.50 yuan ($111.21)a tonne.
Dalian iron ore hit its highest since June 14 on Monday at 799.50 yuan a tonne, as more Chinese cities cut back on lockdowns, quarantine rules and testing requirements to varying degrees, while authorities softened their tone on the dangers posed by the coronavirus.
On the Singapore Exchange, the steelmaking ingredient’s benchmark January contract was down 0.6% at $107.70 a tonne, as of 0346 GMT, retreating after a three-session advance. China is set to announce a further easing of some of the world’s toughest Covid-19 rules as early as Wednesday, Reuters reported citing sources, as the government tries to shore up the economy after restrictions curbed industrial activity and domestic demand.
“A more comprehensive re-opening though will likely have to wait until after the winter with March/April still favoured by analysts,” said National Australia Bank economist Tapas Strickland.
Worries remain about potential spikes in coronavirus cases in China, especially during colder months. “Notwithstanding China pivot optimism, it is worth noting US tech names continue to report production interruptions from operations in China and also uncertain demand,” Strickland added. Apple supplier Foxconn, the world’s largest contract electronics maker, said revenue in November fell 11.4% year on year, reflecting production problems related to China’s Covid controls.
Other Dalian steelmaking inputs also retreated, with coking coal and coke down 0.1% and 1.8%, respectively. On the Shanghai Futures Exchange, rebar slipped 0.9% and hot-rolled coil shed 0.5%, while wire rod was nearly flat. Stainless steel rose 1.4%.
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