BEIJING: Chinese iron ore prices fell 4.5 percent on Monday in their biggest daily drop in almost 10 months, closing at their lowest level since November on high inventories and a weak domestic steel market.
The most traded iron ore contract on the Dalian Commodity Exchange, for May delivery, ended the session at 462.50 yuan ($73.08) a tonne, its lowest close since Nov. 3. The 4.5-percent drop was the steepest since May 24, 2017.
In Shanghai, the most-traded steel rebar contract, also for delivery in May, shed 2.3 percent to close at 3,651 yuan a tonne, its lowest finish since Oct. 31.
Zhao Xiaobo, an analyst at Sinosteel Futures in Beijing, said that iron ore prices were falling because of poor fundamentals and persistent high inventory levels as ongoing environmental restrictions on steel mills reduce demand.
According to a survey by consultancy SteelHome, iron ore inventories at 47 Chinese ports stood at 159.18 million tonnes on March 16, having increased by 600,000 tonnes from the previous week.
China will set more stringent targets for air quality under a new three-year plan, environment minister Li Ganjie, who was on Monday nominated as the country's new ecological environment minister, said on Saturday.
The top steelmaking city of Tangshan, in China's northern Hebei province, said this month it would extend production restrictions on steel mills beyond the March 15 end of the winter heating season.
Plentiful supply and sluggish demand is keeping traders "firmly on the sell button for now", Marex Spectron wrote in a note, adding that slower growth in Chinese new home prices in February had contributed to the negative sentiment.
Of the other steelmaking raw materials, coke also fell sharply on the Dalian exchange, closing down 2.4 at 1,945 yuan a tonne, its lowest finish since Nov. 17. Coking coal recovered from earlier losses to end flat on 1,286 yuan a tonne.
Comments
Comments are closed for this article.