SINGAPORE: Iron ore futures prices declined on Tuesday, as increased shipments from major suppliers Australia and Brazil weighed on sentiment, although lingering hopes of steelmakers in top consumer China restocking cargoes limited the loss.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) closed trade 0.44 percent lower at 789 yuan (USD112.86) a metric ton. The contract touched its highest level since December 3 on Monday.
The benchmark January iron ore on the Singapore Exchange was 0.17 percent lower at USD105.65 a ton by 0717 GMT. It hit its highest level since November 27 at USD106.55 in Monday’s session. Iron ore shipments from Australia and Brazil, the world’s two-largest suppliers, rose 8.6 percent week-on-week during December 22-28, data from consultancy Mysteel showed.
Chinese steel mills are expected to book more cargoes in the coming weeks to meet production needs over the week-long Lunar New Year holiday break in February, said analysts. Meanwhile, Chinese developer Vanke’s bondholders approved its proposal to extend the grace period for the repayment of a 3.7 billion yuan bond, temporarily removing a default risk.
The property market was the largest steel consumer in China, but protracted woes in the sector hit steel consumption, weighing on prices of steel and the feedstocks. Other steelmaking ingredients on the DCE gained ground, with coking coal and coke up 0.99 percent and 0.44 percent, respectively.
Steel benchmarks on the Shanghai Futures Exchange moved sideways. Rebar lost 0.1 percent and hot-rolled coil nudged down 0.33percent. Stainless steel firmed 1.28 percent and wire rod gained 0.32 percent.
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