NEW DELHI: Iron ore futures prices fell on Monday, pressured by persistent concerns about demand in top consumer China and supply overhang amid a lack of significant policy measures to boost steel uptake.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.9% lower at 742 yuan ($102.66) a metric ton, as of 0250 GMT.
The benchmark May iron ore on the Singapore Exchange was 4% lower at $97 a ton, as of 0250 GMT. Market sidestepped data that showed China’s manufacturing activity expanded for the first time in six months in March, according to an official factory survey on Sunday.
“Despite the impressively strong manufacturing PMI data… iron ore futures have plunged to the downside this morning in response to a material 3 million metric tons surge in Australian iron ore shipments over the past week,” said Atilla Widnell, managing director, Navigate Commodities.
“This possibly signals to the market that Q1 mine maintenance programmes have reached their natural conclusion, and rebounding shipments may now start compounding, bulging iron ore inventories at major Chinese ports,” Widnell said.
Market also overlooked data from a private survey that showed China’s manufacturing activity expanded at the fastest pace in 13 months in March, with business confidence hitting an 11-month high, driven by growing new orders from customers at home and abroad.
Iron ore set for third straight daily loss on China demand concerns
Other steelmaking ingredients on the DCE also retreated, with coking coal and coke down 4.6% and 2%, respectively.
Soft demand dragged down steel benchmarks on the Shanghai Futures Exchange. Rebar lost 1.4%, hot-rolled coil shed 0.4%, wire rod fell 1.2% and stainless steel dipped 1%.
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