BEIJING: Iron ore futures prices extended their decline into a second straight session on Monday, to the lowest in more than four months, dragged down by the persistently weak fundamentals of the key steelmaking ingredient in top consumer China.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 5.41% lower at 831 yuan ($115.68)a metric ton, the lowest since Oct. 23, 2023. The benchmark April iron ore on the Singapore Exchange slid 6.71% to $107.45 a ton, as of 0808 GMT, the lowest since Aug. 22.
A temporary supply glut as a result of better-than-expected shipments so far in the first quarter of the year and weaker-than-expected demand recovery has put intense downward pressure on prices, analysts said. “The global ore shipments have climbed to a relatively high level.
The recent ore price fall has not triggered a production reduction among non-mainstream suppliers,” analysts at Citic Futures said in a note. “Some mills postponed again the timing of production resumption, curbing ore demand rise and destocking at ports,” they added.
Poor profitability among steelmakers dented their interest in ramping up output, and the weakness in the steel market permeated into the upstream raw materials market, weighing on ore prices, analysts at Everbright Futures said in a note.
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