SINGAPORE: Iron ore futures prices edged lower on Thursday, pressured by soft demand from China’s manufacturing and infrastructure sectors, though inventory replenishment ahead of the Chinese national day holiday capped losses.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) was down 0.12 percemt at 800 yuan (USD112.57) a metric ton, as of 0255 GMT. The benchmark September iron ore on the Singapore Exchange traded 0.19 percemt lower to USD105.25 a ton. On the demand side, manufacturing and infrastructure investment continued to register negative year-on-year growth in August, while end-use steel demand fell sharply in the third quarter, compared with the 7percemt year-on-year increase in manufacturing steel consumption in the first half of the year, said Chinese broker Galaxy Futures. Still, upcoming inventory replenishment ahead of the Chinese national day holiday could lend support to the ferrous metals sector, Galaxy added.
Meanwhile with production restrictions lifting, hot metal output, a gauge of iron ore demand, increased month-on-month to 2.4055 million tons, according to data from broker Everbright Futures.
On the supply end, China’s August crude iron ore output was up 8.8percemt year-on-year at 81.63 million metric tons, while shipments from top producer Brazil also increased in the third quarter.
Broadly, the dollar index, which measures the US currency against six major peers, fell to the lowest since February 2022 immediately after the decision by the Federal Reserve to cut interest rates, but rebounded to 97.074. A stronger greenback makes dollar-denominated assets less affordable to holders of other currencies.
Other steelmaking ingredients on the DCE lost ground, with coking coal and coke down 0.89 percemt and 0.26 percemt, respectively. All steel benchmarks on the Shanghai Futures Exchange slipped. Rebar dipped 0.51percemt, hot-rolled coil eased 0.65 percemt, wire rod decreased 0.24 percemt and stainless steel edged 0.19percemt lower.
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