BEIJING: Iron ore futures prices fell for a second straight session on Tuesday, as faltering demand amid steel output cuts in top consumer China outweighed support from some short-covering activities.
The most-traded January iron ore contract on China's Dalian Commodity Exchange (DCE) ended morning trade 0.41% lower at 731.5 yuan ($101.88) a metric ton, after rising more than 1% earlier the session.
The benchmark September iron ore on the Singapore Exchange was down 0.25% to $98.75 a ton, as of 0345 GMT, after hitting a high of $101.5 earlier the session.
"Weak fundamentals eventually took hold following a short-lived rebound. How can we expect to see a sustained price rally amid a big reduction in hot metal output?" said a north China-based analyst, requesting anonymity as he is not authorised to speak to media.
"Some bears retreated as portside inventories have fallen for two consecutive weeks, contributing to a price recovery earlier this morning," said the analyst.
Seventy-nine steelmakers had implemented equipment maintenance as of Monday, a rise of 41 from late July, driven by shrinking profitability, analysts at Mysteel consultancy said in a note. Coking coal and coke, other steelmaking ingredients on the DCE, tumbled 3.19% and 3.13%, respectively.
Steel benchmarks on the Shanghai Futures Exchange lost further ground. Rebar declined 1.73%, hot-rolled coil shed 1.62%, wire rod slid 0.59% and stainless steel dipped 0.62%.
"The steel market is still feeling pressure from the switch to new rebar standards, overseas anti-dumping investigation, as well as signs of softening in the manufacturing sector and export market," analysts at Galaxy Futures said in a note.
Comments
Comments are closed.