BEIJING: Iron ore prices were rangebound on Wednesday as growing supply offset solid near-term demand for the steelmaking ingredient.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) dipped 0.38% to 777.5 yuan ($108.70) a metric ton as of 0237 GMT.
The benchmark September iron ore on the Singapore Exchange rose 0.26% to $102.6 a ton as of 0227 GMT.
Healthy steel margins drove daily hot metal output to hover around 2.4 million tons, generating firm demand for raw materials, including iron ore, and preventing a price slump.
Meanwhile, supply of the key steelmaking ingredient is seen increasing in the rest of the year, straining prices, said analysts.
Shipments from key supplier Australia missed expectations in the first half of the year as typhoons disrupted first-quarter shipments.
Moreover, downstream steel consumption showed signs of softening as demand from manufacturing fell, broker Galaxy Futures said. Doubts are mounting over whether steel demand will seasonally pick up in September as expected.
Soft demand for steel could dent appetite for feedstocks.
Meanwhile, other steelmaking ingredients, coking coal and coke, fell 2.96% and 2.1%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange lost ground.
Rebar slipped 0.67%, hot-rolled coil shed 0.74% and wire rod fell 1.93%. Stainless steel added 0.16%.
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