SINGAPORE: Iron ore futures edged lower on Tuesday, shedding gains from earlier in the session, as weak China economic trade data added pressure on authorities to roll out further concrete stimulus measures, while steel output cuts continued to weigh on the market.
The most-traded January iron ore on China’s Dalian Commodity Exchange ended daytime trade marginally lower, down 0.3% to 716.0 yuan ($99.26) per metric ton, falling for a fourth straight session.
On the Singapore Exchange, the benchmark September iron ore was down 0.4% at $100.6 a metric ton, as of 0710 GMT.
China’s imports of iron ore in July slipped 2% from the previous month, customs data showed, as sintering curbs in major steel production hub Tangshan dampened demand for the key steelmaking ingredient.
Overall, the country’s exports fell 14.5% in July year-on-year, while imports contracted 12.4%, data showed, in the biggest decline in outbound shipments from the world’s second-largest economy since February 2020.
China’s economy grew at a sluggish pace in the second quarter as demand weakened at home and abroad, prompting top leaders to promise further policy support at last month’s Politburo meeting.
Concerns of further steel output cuts in China also resurfaced, with Rio Tinto reportedly warning last week that the country’s steel output was reaching saturation point, ANZ analysts said in a note.
Steel mills in China’s southwestern Yunnan province were asked to prepare to cut back production to meet a government mandate on capping 2023 output at last year’s level, two Chinese consultancies said on July 28.
Steel benchmarks on the Shanghai Futures Exchange fell. The most-active rebar contract softened 0.8%, hot-rolled coil dropped 0.7%, wire rod lost 0.3% and stainless steel decreased 0.1%.
Steelmaking ingredients Dalian coking coal and coke slid 1.6% and 0.5%, respectively.
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