SINGAPORE: Iron ore futures slipped on Wednesday, on fears of a reduction in demand in top consumer China amid rising equipment maintenance by steelmakers and environmental curbs in northern region of the country.
The most-traded May iron ore on China’s Dalian Commodity Exchange (DCE) ended morning trade 1.81% lower at 813.5 yuan ($113) per metric ton.
The benchmark April iron ore on the Singapore Exchange tumbled 4.47% to $104.4 a ton, as of 0322 GMT, the lowest since August 2023, after stronger-than-expected US inflation data clouded prospects of the Federal Reserve cutting interest rates soon.
Pressuring prices of the key steelmaking ingredient is growing concern over a possible further reduction in demand in coming weeks, said analysts.
There is an increase in maintenance on blast furnaces among mills this week, indicating further fall in hot metal output, consultancy Shanghai Metals Market said in a note.
Souring sentiment is news the city of Tangshan in north China’s Hebei province, the country’s major steel production hub, announced implementation of a level two emergency response from Wednesday amid forecast of heavy air pollution. Local steel mills are typically required to curb production during emergency actions.
Dalian iron ore hits 5-month low
Moreover, lack of details around additional supportive measures to revive the beleaguered Chinese property markets continued to be a drag, analysts at ANZ said in a note.
“Falling home sales and funding issues looks structural, signalling little room for any improvement in this construction season,” they added.
Other steelmaking ingredients on the DCE receded, with coking coal and coke down 1.32% and 1.67%, respectively. Steel benchmarks on the Shanghai Futures Exchange were mixed.
Rebar dropped 0.14%, hot-rolled coil added 0.29%, wire rod was little moved and stainless steel gained 0.15%.
Comments