Iron ore retreats as hot metal output falls in China By Ruth Chai
- It touched the lowest point since January 9 at 812 yuan earlier in the session
SINGAPORE: Iron ore futures retreated on Thursday as hot metal output fell in top buyer China amid a slow resumption of production after the New Year holiday.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) closed morning trade 1.03% lower at 813 yuan ($116.64) a metric ton.
It touched the lowest point since January 9 at 812 yuan earlier in the session.
The benchmark February iron ore on the Singapore Exchange was down 0.79% at $107.2 a ton after hitting its lowest since January 7 at $106.95.
Hot metal output fell 0.26% week-on-week as several steel mills were slow to resume production in early January following the New Year holiday, according to data released by the Shanghai Metals Market (SMM) on Thursday.
Several other steel mills also carried out planned annual maintenance after the New Year.
SMM data released on January 14 showed that production declined by 2.035 million tons on-week.
Portside spot cargo transactions were also sluggish as traders and steel mills remained cautious about accumulating cargoes beyond essential Lunar New Year restocking, and inventory buildup-induced supply pressure limited upside room for ore prices, SMM said.
Data showing China’s record monthly steel exports in December lent some support to the market.
“Demand appears to be driven by strong global demand offsetting weak domestic demand,” ANZ research said in a note. Meanwhile, record-high iron ore imports in December and an expected increase in ore shipments to China are expected to add pressure on prices.
Other steelmaking ingredients on the DCE lost ground, with coking coal and coke down 2.17% and 1.4%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were mixed.
Rebar lost 0.38% and hot-rolled coil retreated 0.79%, while wire rod gained 0.09% and stainless steel firmed 2.51%.