Iron ore futures extend losses as Rio Tinto reports rise in quarterly shipments

SINGAPORE: Iron ore futures fell for the fifth straight session on Wednesday as Rio Tinto, the world’s top supplier, reported strong iron ore shipments in its fourth quarter, while concerns over safety inspections weighed on the Chinese market.

The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 0.25% lower at 784.5 yuan ($112.63) a metric ton.

The benchmark February iron ore on the Singapore Exchange lost 0.74% to $103.2 a ton as of 0349 GMT after touching its lowest since December 17 at $103 earlier.

Rio Tinto reported a 7% rise in fourth-quarter iron ore shipments on Wednesday, aided by record quarterly production from Pilbara operations and strong rail and port outload performance. An increase in foreign iron ore shipments would exert downward pressure on Chinese iron ore prices.

Meanwhile, concerns about stricter safety supervisions following an explosion at a steel plate factory in China’s northern region of Inner Mongolia stoked fears over feedstocks demand.

Though hot metal output rose 22,800 million tons week-on-week, transaction volumes of iron ore at major ports in China have been sluggish, according to data from Mysteel released January 21.

Overall, the sentiment has remained bearish and risk-adverse, with iron ore prices seen facing resistance in the short-term, the Shanghai Metals Market said. Other steelmaking ingredients on the DCE languished, with coking coal and coke declining 2.65% and 1.09%, respectively.

Steel benchmarks on the Shanghai Futures Exchange dipped.

Rebar shed 0.42%, hot-rolled coil loss 0.21%, wire rod softened 0.17 and stainless steel remained unchanged.