Iron ore slips as mill maintenance, rising China port stocks weigh

SINGAPORE: Iron ore futures prices eased on Tuesday, weighed by steel mills undergoing annual furnace maintenance and rising Chinese port inventories.

The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.64% lower at 775.5 yuan ($110.30) a metric ton, as of 0258 GMT.

The benchmark January iron ore on the Singapore Exchange was 0.49% lower at $104.25 a ton.

Steel mills currently have blast furnace annual maintenance plans, leading to a wider decline in pig iron production, while port inventories continue to accumulate, indicating a marginal weakening of fundamentals, said Chinese broker Everbright Futures.

Total iron ore stockpiles across ports in China climbed 1.19% week-on-week to about 145.5 million tons, as of December 19, according to SteelHome data.

Broadly, major steel producers posted mixed readings. Japan’s crude steel output fell 1.6% in November from a year earlier to 6.77 million tons, while India’s steel production grew 6.1% year-on-year against a revised 5.9% rise in October.

Meanwhile, the dollar index, which measures the currency against six other units, eased to 98.18 in early trading on Tuesday.

It remains on course for a 9.5% drop for the year, its steepest annual fall since 2017.

A weaker greenback makes dollar-denominated assets more affordable to holders of other currencies.

Other steelmaking ingredients on the DCE were mixed, with coking coal up 1.04% and coke down 0.17%.

China’s coking coal supply continued tightening as of December 22, impacted by strict safety scrutiny as well as slower year-end production, though softer downstream demand capped price gains, said Mysteel in a separate note.

Steel benchmarks on the Shanghai Futures Exchange were mostly up.

Rebar edged up 0.19%, hot-rolled coil rose 0.12%, and stainless steel climbed 1.1%, while wire rod dipped 0.77%.