SINGAPORE: Iron ore prices slipped on Monday, weighed down by mounting concerns over demand in top consumer China after steelmakers in key production hubs imposed output curbs to protect air quality.
The most-traded iron ore contract on China’s Dalian Commodity Exchange (DCE) fell 0.73 percent to 684.5 yuan (USD102.53) a metric ton by 0145 GMT after hitting a four-week high of 694.5 yuan on November 6.
The benchmark December iron ore on the Singapore Exchange was 0.58 percent lower at USD92.5 a ton, as of 0135 GMT. Authorities in northern China, including steelmaking hubs Tangshan and Handan in Hebei province, announced emergency response measures from Monday amid forecasts of heavy air pollution, according to official WeChat posts. Such measures typically require steelmakers to curb production, reducing demand for steelmaking raw materials.
The restrictions added pressure to prices of the key steelmaking ingredient already facing seasonal weakness in demand. Average daily hot metal output among Chinese steelmakers slid for a fourth straight week, declining 0.5 percent from the previous week to 2.31 million tons as of November 5, the lowest since late March, consultancy Mysteel data showed. Hot metal output, a blast furnace product, is widely viewed as a gauge of iron ore demand.
“Iron ore prices will remain under pressure if there is no material improvement in demand at home and abroad in the fourth quarter,” analysts at broker Yongan Futures said in a note.
Coking coal and coke, other steelmaking ingredients, fell 0.81 percent and 0.39 percent, respectively. Steel benchmarks on the Shanghai Futures Exchange were mixed. Rebar shed 0.16 percent, hot-rolled coil slid 0.37 percent, while stainless steel added 0.6 percent.
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