BEIJING: Dalian iron ore futures extended their fall to a fourth straight session on Thursday amid concerns over possibly faltering steel demand in top consumer China, while Singapore prices edged up on a softer dollar.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) was 1.16% lower at 896.5 yuan ($124.63) a metric ton, as of 0230 GMT.
Despite Beijing taking further steps to address the issues in the property sector, the market doesn’t expect demand to recover anytime soon, analysts at ANZ bank said in a note.
Casting further shadow on steel demand prospects is uncertainty in the infrastructure sector after Beijing ordered some indebted local governments to halt some projects, said analysts.
“The increase in ore demand will be relatively slow in the near term as downstream demand has not recovered yet and it’s hard to see any obvious improvement in steel margins,” analysts at Sinosteel Futures said in a note.
The benchmark March iron ore on the Singapore Exchange rose 0.74% to $119.95 a ton, as of 0220 GMT.
The dollar index ticked down, making greenback-priced cargoes less expensive for holders of other currencies.
Ex-tropical cyclone Lincoln is expected to intensify back to cyclonic strengths on Thursday night hitting Australia’s northwest, the country’s weather bureau said, as ports across the region began clearing ships from the site.
“It’s worth monitoring the impact of weather on shipments; also, there is still strong expectation of production ramping up after downstream steel demand may show signs of improvement by the end of February,” analysts at First Futures said in a note.
Other steelmaking ingredients on the DCE advanced further, with coking coal and coke up 2.87% and 2.23%, respectively, finding continuous support from worry on supply reduction after China’s top coal-producing region of Shanxi ordered miners to curb overproduction.
Steel benchmarks on the Shanghai Futures Exchange were mixed.
Rebar and wire rod were little changed, hot-rolled coil nudged down 0.15%, while stainless steel added 0.55%.
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