BEIJING: Iron ore futures slid on Monday as weak demand and high inventories in top consumer China weighed on the key steelmaking ingredient.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended day-time trade 3.3% lower at 825.50 yuan ($113.56) a metric ton.
The benchmark August iron ore on the Singapore Exchange was 1.8% lower at $108.4 a ton as of 0833 GMT. The declines came after a weekly gain, supported by dovish comments from the US Federal Reserve and investors’ hopes of additional measures to boost China’s economy from a key meeting on July 15-18.
However, the real supply and demand situation is not improving and therefore the higher price level touched last week would be hard to sustain, said analysts at Xinhu Futures, citing the lower-than-expected demand for finished steel products recently.
Amid weaker buying from steel mills, port inventories rose. Inventories at major ports in China rose to 150 million tons on Friday, 25% higher compared with the beginning of this year and 18% higher compared with the same time a year earlier, data by information provider Mysteel showed.
Other steelmaking ingredients on the DCE moved lower, with coking coal and coke down 1.6% and 2.7%, respectively. Steel benchmarks on the Shanghai Futures Exchange mostly trended down. Rebar lost 2.3%, hot-rolled coil slipped 1.9%, wire rod dropped 2.3%, while stainless steel was little moved.
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