SINGAPORE: Iron ore futures struggled for direction on Thursday as falling China lump ore premiums signalled weak demand for the steelmaking material and countered support from a softer dollar. The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) inched 0.13 percent higher to 797 yuan (USD112.57) a metric ton by 0317 GMT.
The benchmark December iron ore on the Singapore Exchange was 0.04percent lower at USD106.5 a ton. China’s seaborne iron ore lump premiums against 62percent Fe fines had plunged 42.2percent from two months ago, as of November 25, and hit their lowest level since late May 2024, said Chinese consultancy Mysteel.
Waning demand for lump ores from loss-suffering steelmakers have led to the weak premiums, Mysteel said. India’s finished steel imports during the first seven months of the financial year were down 34.1percent year-on-year, while China’s steel output is set to slip below 1 billion tons this year for the first time in six years after a government pledge to reduce production.
A decline in coking coal and iron ore prices has picked up pace due to increased coal supply and continued inventory accumulation at coal mines, said Chinese broker Galaxy Futures. Pig iron production is expected to decline further this week, putting pressure on raw materials, Galaxy said. The US dollar index was flat at 99.433, having retreated from a six-month high hit a week ago to head for its largest weekly drop since July.
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