China’s benchmark iron ore futures dropped for the fourth straight session on Thursday, shedding more than 5% and denting steel prices as investors were still concerned about government interventions on the market.
The country’s state planner has urged some iron ore traders to release excessive inventory and restore stock to reasonable levels, it said following a joint investigation with the market regulator in Qingdao.
Portside inventories of imported iron ore in China stood at 156.35 million tonnes as of Feb. 11, hovering around over three-year highs, data from SteelHome consultancy showed.
“Previous increase in iron ore prices was more related to expectation and had nothing much to do with the fundamentals,” analysts with GF Futures wrote in a note, adding that the steelmaking ingredient is pressured by policies.
The most actively traded iron ore futures on the Dalian Commodity Exchange, for May delivery, dived as much as 5.2% to 675 yuan ($106.62) per tonne. They closed down 3.8% to 685 yuan a tonne.
Steel products on the Shanghai Futures Exchange were also dented by falling raw material pries.
Construction used steel rebar declined 2% to 4,686 yuan a tonne, and hot rolled coils used in the manufacturing sector slipped 1.5% to 4,823 yuan per tonne.
Stainless steel futures on the Shanghai bourse, for March delivery, fell 2.1% to 18,720 yuan a tonne.
Dalian coking coal futures rose 1.1% to 2,439 yuan per tonne. Coke prices jumped 1.5% to 3,210 yuan a tonne.