SINGAPORE: Iron ore prices lost ground on Tuesday, dragged down by rising supply from major suppliers and sluggish demand for the key steelmaking ingredient in top consumer China.
The most-traded iron ore contract on China’s Dalian Commodity Exchange (DCE) slid 0.59 percent to 672 yuan (USD101.08) a metric ton by 0137 GMT. The benchmark December iron ore on the Singapore Exchange was also 0.59 percent lower at USD90.7 a ton, as of 0127 GMT. Supply pressure persisted amid rising shipments and arrivals, analysts at broker Everbright Futures said in a note. Iron ore shipments from major suppliers Australia and Brazil rose 1.3 percent from the week before to 27.9 million tons as of November 2, data from consultancy Mysteel showed.
Demand, meanwhile, remained subdued in China as steelmakers were cautious about restocking ore due to weak profit margins, softer downstream steel consumption and elevated steel inventories.
Coking coal and coke, other steelmaking ingredients, shed 0.46percent and 0.72 percent, respectively, weighed down by anticipation of increased supply.
A Mysteel survey showed coal mines in northern China’s Shanxi province continued to resume operations, with 40 mines remaining shut as of November 2, down from 44 a week before.
Several mines had been closed for safety inspections following a fatal accident in Shanxi in May. Steel benchmarks on the Shanghai Futures Exchange moved sideways. Rebar retreated 0.3 percent, hot-rolled coil lost 0.16 percent, while stainless steel rose 2.04 percent.