SINGAPORE: Iron ore futures struggled for direction on Thursday, as traders weighed reduced demand for feedstock from imminent production cuts versus signs that Beijing will implement more property stimulus measures.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.4percent lower at 745.5 yuan (USD108.91) a metric ton, as of 0302 GMT.
The benchmark March iron ore on the Singapore Exchange was 0.27percent lower at USD98.4 a ton. Some Chinese steelmakers in the northern region will need to trim production by at least 30percent from March 4 to ensure clean air quality during the annual parliamentary meeting on March 5.
The measure will temper the demand for feedstock, though higher steel prices from reduced production and the expectation of stimulus policies during the parliamentary meeting will encourage mills to restock, said Xin Ge, deputy director at consultancy Lange Steel. On Wednesday, Beijing indicated its willingness to forcefully resuscitate the property market following home-buying curbs in Shanghai and the lifting of rules limiting property developers’ debt. Speculation is afoot that property-easing measures for other major cities will follow soon.
Blast furnace operating rate increases in 242 steel mills week-on-week, with hot metal output up 7,700 metric tons from the week before the Lunar New Year holidays, per data from the Shanghai Steel Market released on February 25.
Spot prices of seaborne iron ore have risen 1.46percent week-on-week to USD97.5 on February 25, according to data from consultancy SteelHome.
Other steelmaking ingredients on the DCE declined, with coking coal and coke losing 2.15percent and 0.63percent, respectively.
Comments
Comments are closed for this article.