Iron ore futures prices fell on Tuesday, pressured by weak China manufacturing data, but logged solid quarterly gains as robust export-driven rallies in July and August outweighed recent declines.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 0.64% lower at 780.5 yuan ($109.58) a metric ton.
The contract declined 0.51% this month, but ended the quarter up 9.89%.
The benchmark September iron ore on the Singapore Exchange was 0.05% lower at $105.25 a ton, as of 0709 GMT. The contract has risen 12.27% so far in the quarter.
China’s manufacturing sector contracted for the sixth consecutive month in September, according to an official survey, suggesting that producers are waiting for further stimulus to boost domestic demand.
New export orders rose for the first time since March, alleviating some concerns over the recent weakness in exports.
Citi analysts had noted earlier this month that the better-than-expected export performance may not be sustainable as steel margins come under pressure.
A private-sector survey by RatingDog showed that China’s factory activity in September expanded at the quickest pace since March, with rising new orders driving faster production growth.
“The notable improvement of profitability in raw material sectors such as steel hints at the government’s anti-involution policies at work,” said analysts from Goldman Sachs.
Other steelmaking ingredients on the DCE lost ground, with coking coal NYMEX:ACT1! and coke (DCJcv1) down 3.88% and 2.61%, respectively.
Steel benchmarks on the Shanghai Futures Exchange declined. Rebar RBF1! fell 1.13%, hot-rolled coil EHR1! eased 1.54%, wire rod (SWRcv1) lost 0.16% and stainless steel HRC1! edged down 0.43%.
Billet production in Chinese steelmaking hub Tangshan rose during September 22-28, even though profits that steelmakers could earn from billet sales contracted, according to consultancy Mysteel.
Source: Reuters