SINGAPORE: Iron ore futures extended declines to a second straight session on Monday, weighed down by slower production of hot metal in China, although stronger economic data from the top consumer limited the fall.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 1.37% lower at 758.0 yuan ($103.43) a metric ton.
The benchmark February iron ore on the Singapore Exchange eased 1.19% to $97.65 a ton, as of 0350 GMT.
“With the Chinese New Year holiday beginning in just four weeks’ time, the pre-holiday stockpiling of iron ore will lend some support to prices of the feedstock this month,” Chinese consultancy Mysteel said.
“But ore prices will face downward pressure as the seasonal decline in hot metal output at mills will see slow ore replenishment.”
Output at Chinese blast-furnace steel producers has continued to decline steadily, driven by increasing maintenance stoppages as Chinese New Year is approaching, Mysteel added. Meanwhile, global iron ore supply has recently been at a high level, driven by shipments from Australian mines, Chinese consultancy Hexun Futures said.
For the next week, the average daily molten iron output will continue to decline, while iron ore inventory will continue to accumulate slightly, Hexun added.
China’s services activity expanded at the fastest pace in seven months in December, driven by a surge in domestic demand, but orders from abroad declined, reflecting growing trade risks to the economy, a private sector survey showed on Monday.
Other steelmaking ingredients on the DCE were weaker, with coking coal and coke down 0.22% and 1.71%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange posted marginal losses.
Rebar slipped about 0.6%, hot-rolled coil shed around 0.9% and wire rod dipped 0.03%, while stainless steel gained almost 0.1%.
Comments