Iron ore retreats from two-week high with supply glut concerns back in focus
- The benchmark December iron ore on the Singapore Exchange was down 0.77% at $103.55 a ton
BEIJING: Iron ore futures prices snapped a three-session winning streak on Thursday, with focus back to concerns over a supply glut in the fourth quarter due to strong supply and weakening demand in top consumer China.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) fell 0.95% to 783.5 yuan ($110.09) a metric ton, as of 0256 GMT, after hitting a more than two-week high on Wednesday.
The benchmark December iron ore on the Singapore Exchange was down 0.77% at $103.55 a ton, as of 0246 GMT.
Shipments of the key steelmaking ingredient to China have been robust with November imports expected to stay above 100 million tons for a sixth straight month, keeping China’s total imports for the year on track for a new record.
By contrast, hot metal output, a gauge of iron ore demand, will likely fall in coming weeks, pressuring prices of raw materials, analysts at broker Galaxy Futures said in a note.
Additionally, China left benchmark lending rates unchanged on Thursday for the sixth consecutive month in November, meeting market expectations.
Coking coal and coke, other steelmaking ingredients, extended declines for a third straight session, down 3.91% and 1.37%, respectively, dragged by expectations of sagging demand and rising supply.
Steel benchmarks on the Shanghai Futures Exchange languished. Rebar fell 1.27%, hot-rolled coil shed 0.85%, wire rod dipped 0.42% and stainless steel lost 0.41%.