Dalian iron ore was little changed on Tuesday as traders assessed mixed macroeconomic data and resilient steel demand from top consumer China.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade little changed at 699 yuan a metric ton.
The benchmark July iron ore on the Singapore Exchange fell 1.24% to $92.9 a ton as of 0704 GMT.
Iron ore weakened after data showed China’s steel production fell in May, said ANZ analysts.
China’s crude steel output in May slid 6.9% from a year earlier to 86.55 million tons, data from the National Bureau of Statistics (NBS) showed on Monday.
Meanwhile, new home prices in China fell in May, extending a two-year long stagnation, official data showed on Monday, highlighting challenges in the sector despite several rounds of policy support measures.
The country’s factory growth hit a six-month low in May, though retail sales, a gauge for consumption, picked up steam, offering temporary relief amid a fragile truce in its trade war with the United States.
While blast furnace production is peaking, profits remain high, and steel mills are not incentivised to reduce production, said broker Galaxy Futures.
Around 60% of blast-furnace steel mills in China reported positive margins as of June 12, said consultancy Mysteel.
Moreover, port arrival volumes of iron ore fell 8.62% week-on-week to 23.85 million tons as of June 13, Mysteel data showed.
Other steelmaking ingredients on the DCE strengthened, with coking coal and coke (DCJcv1) up 0.7% and 1%, respectively.
Steel benchmarks on the Shanghai Futures Exchange traded sideways. Rebar ticked up 0.17% and hot-rolled coil gained 0.13%, while wire rod (SWRcv1) and stainless steel were both down nearly 0.5%.
Source: Reuters