MANILA: Dalian and Singapore iron ore futures slipped on Tuesday, with traders curbing optimism about China’s demand prospects in 2023 as the world’s top steel producer grapples with surging COVID-19 infections.
Chinese steel benchmarks were also mostly lower ahead of the US inflation data due later in the day, and policy signals from the Federal Reserve the next day.
The most-traded iron ore for May delivery on China’s Dalian Commodity Exchange ended daytime trade 0.2% lower at 808.50 yuan ($115.90) a tonne.
On the Singapore Exchange, the steelmaking ingredient’s benchmark January contract was down 0.9% at $108.45 a tonne, as of 0700 GMT. “The worsening health and current economic news is now pushing back somewhat against the exuberance evident in the past few weeks on the evidence of China beating the retreat on its hitherto zero-Covid stance,” said Ray Attrill, head of FX strategy within the fixed income, currencies and commodities division of National Australia Bank.
Indicating a rapid spread of infections, people queued outside fever clinics at Chinese hospitals for Covid-19 checks on Monday, as mobility restrictions have been eased, marking a significant shift in the country’s containment strategy.
Also weighing on sentiment, new bank lending in China rebounded less than expected in November from the previous month amid Covid flare-ups.
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