BEIJING: Iron ore futures prices slipped on Monday, as traders took a cautious stance after rising stocks and weak steel margins counteracted with hopes that demand will pick up in top consumer China following a week-long Lunar New Year holiday break.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange reversed course from earlier in the session to close daytime trade 0.52% lower at 951.5 yuan ($132.20) a metric ton.
The benchmark March iron ore on the Singapore Exchange slid 2.91% to $127.45 a ton, as of 0706 GMT, in part due to fading bets of early US rate cuts amid stronger-than-expected US producer prices in January. The weakness in the Singapore benchmark came after it had climbed by over 3% over the holiday break when Chinese bourses were closed.
“Such a steep price fall is out of my expectation as we thought prices would consolidate today; the sharp drops in the coal market might have given a blow to market confidence, dragging down ore prices as well,” said Cheng Peng at Sinosteel Futures.
Iron ore inventory at major Chinese ports surveyed rose 4% during the holiday break to 136.76 million tons as of Feb. 18, while profitability among mills surveyed slid to 25.54%, the lowest since mid-November, data from consultancy Mysteel showed.
Dalian ore prices rose earlier in the day, boosted by the prospect of further stimulus to be rolled out after China’s Premier Li Qiang on Sunday urged departments under the cabinet to do more work to boost public confidence and expectations, state media reported.
Other steelmaking ingredients on the DCE also posted losses as sentiment was soured after some steel mills in north China’s Hebei and east China’s Shandong lowered their procurement prices for coke by between 100 yuan and 110 yuan a ton from Monday.
Coking coal and coke tumbled 4.6% and 3.2%, respectively. Steel benchmarks on the Shanghai Futures Exchange were mixed. Rebar fell 1.07%, hot-rolled coil shed 0.88%, while wire rod added 0.52% and stainless steel advanced 0.55%.
Comments
Comments are closed.