BEIJING: Prices of iron ore futures fell on Friday, weighed by persistently sliding near-term demand and higher stocks in top producer China, but were headed for a second straight week of gains.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.13% lower at 757 yuan ($106.70) a metric ton, as of 0255 GMT.
The benchmark October iron ore on the Singapore Exchange was 0.28% lower at $101.55 a ton, but stayed well above the key psychological level of $100 for five straight sessions.
“Risks remained skewed to the downside in the short term; China’s steel exports may come under threat as tensions rise with trade partners,” ANZ analysts said in a note, forecasting a price of $90-$100 a ton for the rest of 2024.
Nippon Steel and other Japanese steelmakers are urging Tokyo to consider curbing cheap imports from China. Both benchmarks for the key steelmaking ingredient, however, posted a second week of gains, rising between 4% and 5%.
“Several factors jointly contributed to this wave of price rebound, including stronger expectation of a Fed (US Federal Reserve) interest rate cut, better demand with peak construction season approaching and the suspension of steel capacity replacement,” said Cao Ying, an analyst at SDIC Essence Futures.
Average daily hot metal output among steelmakers surveyed fell for a sixth straight week, dropping 1.6% to about 2.21 million tons as of Aug. 30, the lowest since mid-March, data from consultancy Mysteel showed.
Iron ore ticks up on renewed hopes of improving China demand
“Steel margins have somewhat improved and hot metal output slowed down falling pace. But we believe the room for rebound will be limited considering the market remained oversupplied,” Ying said. Other steelmaking ingredients on the DCE were mixed, with coking coal down 0.68% and coke little changed.
Most steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar dipped 0.4%, hot-rolled coil edged down 0.03%, wire rod slipped 1.94% while stainless steel added 0.43%.
Comments