Iron ore dips, pressured by steel output curbs in Tangshan, high stocks

BEIJING: Iron ore prices slid on Monday, dragged down by production curbs in China’s top steel hub Tangshan, a sluggish post-holiday recovery in steel demand and elevated portside stocks.

The most-traded iron ore contract on China’s Dalian Commodity Exchange (DCE) fell 0.13percent to 747 yuan (USD108.81) a metric ton as of 0145 GMT.

The benchmark April iron ore on the Singapore Exchange eased 0.16percent to USD98.2 a ton as of 0135 GMT. The northern city of Tangshan, China’s key steel production hub, activated a level-two emergency response from Sunday due to forecasts of worsening air quality, local authorities said on their WeChat account on Saturday. Such measures, which typically require local mills to curb production, and cool demand for raw materials, follow earlier calls for northern Chinese mills to cut output to ensure cleaner air during the annual parliamentary meeting starting March 5.

Moreover, slow recovery in steel demand and mounting stocks dampened mills’ appetite for restocking feedstocks, including iron ore, weighing on prices of the key steelmaking ingredient, said Guiqiu Zhuo, an analyst at broker Jinrui Futures. High portside stocks, which jumped to a record high of 162.17 million tons as of February 27, per data from consultancy Steelhome, also limited the price upside, Zhuo added.

Coking coal and coke, other steelmaking ingredients, fell 0.97percent and 0.4percent, respectively. Most steel benchmarks on the Shanghai Futures Exchange were little changed. Rebar, hot-rolled coil and wire rod saw changes within 0.1percent, while stainless steel added 0.64percent.