Iron ore futures in China fell for a fourth straight session on Tuesday as supply concerns eased, while stepped-up production curbs in top steelmaking city of Tangshan added more pressure. The most-traded January 2020 iron ore contract on the Dalian Commodity Exchange ended down 2.2% at the session's lowest at 609 yuan ($86.25) a tonne, its weakest finish since June 11.
The most-active September 2019 iron ore contract on the Singapore Exchange was down 0.5% at $86.08 a tonne in late trade. "The iron ore market is currently mainly driven by supply factors, such as the rising export volumes from miners," a Shanghai-based trader said. Top steel producer China's iron ore imports surged 21% in July from the month before to their highest level since January, as supplies surged from miners in Australia and Brazil.
Reduced iron ore shipments after a deadly tailings dam collapse in Brazil in January and a cyclone in Australia, and China's ramped-up steel output, lifted spot prices of the raw material to five-year peak in recent months. Prices have pulled back but they remain well above 2018 levels. "Despite the steel production restrictions in China, I think demand for iron ore, particularly for high-grade materials, is still at a healthy level," the trader said.
While the US-Sino trade dispute has dampened global economic growth, it has not yet affected Chinese demand for BHP Group's iron ore, Chief Executive Andrew Mackenzie said on Tuesday. Under Tangshan's new anti-pollution measures, steelmaker HBIS Tangsteel is allowed to operate only one sintering plant over a four-day period from Aug. 18. Huaxi Steel and Guoyi Special Steel can operate only two plants each, according to a report by Mysteel consultancy.
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