Iron ore heads for fourth weekly loss as falling steel margins slow buying
- The contract hit its lowest level since April 15 at 760.5 yuan earlier in the session
Iron ore prices extended declines on Friday and were set for a fourth weekly loss, as falling margins for steelmakers in top consumer China curbed buying appetite for the key steelmaking ingredient.
By 0245 GMT, the most-traded iron ore contract on China’s Dalian Commodity Exchange (DCE) slid 0.95% to 766 yuan ($113.05) a metric ton, shedding 2.1% so far in the week.
The contract hit its lowest level since April 15 at 760.5 yuan earlier in the session.
The benchmark July iron ore on the Singapore Exchange was little changed at $101.5 a ton, as of 0235 GMT, declining 3.6% so far this week.
It touched its lowest since March 6 at $100.85 earlier. Steel margins have been squeezed by rising coal prices and diminishing domestic demand, said analysts.
About 59% of Chinese steelmakers were operating at a profit on June 4, versus a nine-month high of 64% on May 14, data from consultancy Mysteel showed.
The average daily hot metal output, a gauge of iron ore demand, eased 0.1% from the week before to a three-week low at 2.41 million tons, the data showed.
“Softer-than-expected seasonal steel demand in China, affected by persistent rainfall and unusually high temperatures, has weighed on iron ore consumption at a time when global supply is rising,” analysts at shipping tracker Kpler said in a note.
Other steelmaking ingredients were little changed, with coking coal and coke up 0.32% and 0.17%, respectively.
Steel benchmarks on the Shanghai Futures Exchange moved sideways.
Rebar shed 0.19%, hot-rolled coil dropped 0.35%, wire rod nudged up 0.09% and stainless steel retreated 0.98%.
Comments