Iron ore dips as traders weigh China demand

0
1088

Iron ore futures fell on Tuesday, with the Dalian benchmark price pulling back from the previous session’s contract high, as traders assessed demand in top steel producer China while also keeping an eye on regulatory risks.

The steelmaking ingredient, however, was on track for a 2% monthly gain in the Dalian Commodity Exchange. It has risen 11% on the Singapore Exchange this month, in a rally driven by improved demand prospects after China dismantled strict COVID curbs.

The so-called China reopening has also boosted spot iron prices, with the benchmark 62%-grade material rising above $130 a tonne on Monday, the highest since June, SteelHome consultancy data showed.

The most-traded May iron ore on the Dalian exchange ended daytime trade 1.3% lower at 866 yuan ($128.25) a tonne.

“Iron ore prices may stay range-bound when steel mills resume production after the CNY (Lunar New Year) break,” industry consultancy and data provider Mysteel said in its latest weekly outlook.

Iron ore port stocks in China also likely accumulated after the week-long holiday, it said.

Worries about regulatory intervention as China has warned against excessive market speculation were also seen curbing iron ore prices.

“The risk of price regulation still exists,” Zhongzhou Futures analysts said in a note.

Other Dalian steelmaking inputs were also under pressure, with coking coal slumping 4%, and coke shedding 3.5%.

China is set to receive at least two cargoes of Australian coal in early February, according to traders and shiptracking data, the first since an unofficial ban on imports in place since 2020 was lifted earlier this month.

Rebar on the Shanghai Futures Exchange dropped 2.2%, hot-rolled coil slumped 2.5%, and wire rod dipped 1%. Stainless steel climbed 0.6%.

Source: Reuters

LEAVE A REPLY

Please enter your comment!
Please enter your name here