SINGAPORE: Iron ore futures fell for a third straight session on Tuesday amid renewed market talk of crude steel production cuts in top consumer China, which has long been plagued by overcapacity.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 2.18% lower at 695.5 yuan ($96.73) a metric ton.
The benchmark June iron ore on the Singapore Exchange was 1.31% lower at $95.8 a ton.
On Tuesday, Tang Zujun, vice president of the China Iron and Steel Association, told an industry event in Singapore that China is working to control the expansion of its steel sector to resolve a mismatch between supply and demand.
“Renewed speculation surrounding crude steel production cuts has reignited concerns in the iron ore market,” ANZ wrote in a note earlier on Tuesday, citing unspecified reports that suggested several mills in Shandong province had started curbing output.
Production cuts for steel could dent demand for iron ore, a key steelmaking ingredient.
Still, China’s industrial profits picked up pace in April, official data showed on Tuesday, signalling economic resilience in the face of trade tensions with the United States and lingering deflationary pressures at home.
Dalian iron ore lower on weak China steel demand, property gloom
Meanwhile, hot metal output in China, a gauge of iron ore demand, dipped 0.48% month-on-month to 2.4 million tons in May, said broker Everbright Futures.
Other steelmaking ingredients on the DCE weakened, with coking coal and coke down 0.81% and 2%, respectively.
Steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar shed 1.36%, hot-rolled coil fell 1.46%, wire rod lost 0.19% and stainless steel dipped 0.04%.
Comments
Comments are closed for this article.