SINGAPORE: Iron ore futures drifted lower on Thursday, weighed down by high inventories that underscore steady blast furnace production, leaving little room for price hikes as demand softens.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) was down 1.58percent at 767.5 yuan (USD110.48) a metric ton, as of 0215 GMT. The contract is set for a fourth consecutive session of decline, if losses hold.
The benchmark March iron ore on the Singapore Exchange was 1.85percent lower at USD100.6 a ton. Blast furnace operating rates across 242 surveyed steel mills stayed at 86.41percent, an increase of 1 percentage point week-on-week, according to data from the Shanghai Metals Market released on February 4.
The blast furnace utilisation rate also increased marginally, and daily hot metal output climbed by 21,000 tons week-on-week, according to the note.
Although the resumption of blast furnace operations provided some support for demand, high iron ore inventories limited price gains, as most steel mills have largely completed pre-Lunar New Year restocking. Several blast furnaces and electric-arc furnaces have also paused production for planned maintenance, raising concerns over steelmaking feedstock demand.
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