SINGAPORE: Iron ore futures dipped on Tuesday, extending losses from a commodities selloff in the previous session as sluggish steel demand ahead of the Chinese Lunar New Year later this month weighed on prices further.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 1.21percent lower at 777 yuan (USD111.97) a metric ton, as of 0246 GMT. The benchmark March iron ore on the Singapore Exchange was 0.84percent lower at USD102 a ton. Prices plummeted on Monday on the back of a broad-based commodities slump led by gold and silver.
Transaction volumes of iron ore at major Chinese ports also fell on Monday, according to data from consultancy Mysteel. More steel mills have announced maintenance plans ahead of the nine-day Chinese Lunar New Year holidays starting February 16.
They will resume production in late February or early March, tempering the demand for feedstock as hot metal production dips, according to another note from Mysteel.
Global iron ore shipments increased from January 26 to February 1, with shipments from mining heavyweights Australia and Brazil increasing by 1.267 million tons during that period. Iron ore inventories at major Chinese ports rose 1.16percent week-on-week, according to data from consultancy Steelhome released on January 30.
A combination of steel production curbs amid environmental regulations and weak domestic demand is expected to pressure prices over the coming months, a report from BMI, a unit of Fitch Solutions, published on Monday said.
However, a still resilient global economy should continue to support Chinese steel exports, holding a floor under prices, the report added.
Other steelmaking ingredients on the DCE lost ground, with coking coal and coke down 1.37 percent and 0.49percent, respectively. Steel benchmarks on the Shanghai Futures Exchange declined.
Rebar shed 0.51 percent, hot-rolled coil lost 0.37 percent, wire rod fell 0.26 percent and stainless steel dropped 0.26 percent.
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