SINGAPORE: Iron ore futures prices traded within a narrow range on Wednesday, as investors weighed output cuts in the Chinese steel sector against seasonal demand for the steelmaking ingredient.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.06% lower at 778 yuan ($107.11) a metric ton, as of 0301 GMT.
The benchmark April iron ore on the Singapore Exchange was 0.07% higher at $101.65 a ton.
Rizhao Iron & Steel plans to complete the dismantling of four 1,080 cubic meter blast furnaces in early April, removing annual hot metal output of 1.9 million tons, according to consultancy Fubao and a person familiar with the matter.
Rizhao Steel did not immediately respond to a Reuters request for comment.
This comes as several steel makers in China’s Xinjiang region began production cuts from Monday, local reports said, after Beijing earlier stated its intent to curb capacity in an industry long plagued by overcapacity.
Iron ore ticks up on resilient steel demand
Still, key steel enterprises produced 2.75 million tons of crude steel per day in March so far, marking a monthly increase of 1.6%, said broker Hexun Futures, citing statistics from the China Iron and Steel Association.
“Although Chinese steel mills lifted their production last week, prices of imported iron ore still recorded notable declines as steel consumption among end-users was relatively weak,” said Chinese consultancy Mysteel.
Iron ore prices remained steady despite the industry entering its normal peak construction season, said ANZ analysts, adding that gains were offset by signs of weakness in the steel market.
Other steelmaking ingredients on the DCE gained, with coking coal and coke up 0.1% and 1.13%, respectively.
Steel benchmarks on the Shanghai Futures Exchange advanced. Rebar edged 0.31% higher, hot-rolled coil was up 0.15%, stainless steel rose nearly 0.4%, while wire rod ticked up 0.06%.
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