Iron ore futures dipped on Monday, weighed down by concerns over demand prospects in top consumer China after steelmakers cut production, reducing the ore’s demand.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) fell 1.47% to close Asia afternoon trade at 773 yuan ($106.59) a metric ton at 0700GMT.
Beijing said it intends to curb steel production in the country due to overcapacity.
While there is no official release yet, some steelmakers have voluntarily reduced production in anticipation of the formal announcement, therefore curbing demand for iron ore.
Furthermore, worries over demand prospects, intensified by the escalation of a global trade war sparked by fresh U.S. tariffs, are also pressuring prices.
Other steelmaking ingredients on the DCE faltered, with coking coal NYMEX:ACT1! and coke (DCJcv1) losing 3.42% and 2.19%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange fell. Rebar RBF1! shed 1.03%, hot-rolled coil EHR1! slipped 0.79%, wire rod (SWRcv1) eased 0.79% and stainless steel HRC1! lost 0.85%.
The Singapore Exchange is closed on Monday for a public holiday.
Source: Reuters