Iron ore touched multi-month lows on Monday amid concerns over demand in top consumer China and rising portside ore inventories, although falling shipments helped pare some losses in the afternoon trading.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade little changed at 765 yuan ($107.40) a metric ton. The contract hit its lowest level since July 10 at 756 yuan earlier in the session.
The benchmark December iron ore (SZZFZ5) on the Singapore Exchange was up 0.72% at $102 a ton, as of 0725 GMT, after hitting its lowest level since September 1 at $100.85 earlier.
Prices were supported by lower global shipments, which slipped to the lowest level in two months, data from consultancy Mysteel showed.
Further signs of easing trade tensions between China and the United States also boosted risk appetite.
China said on Monday that it would suspend port fees levied on U.S.-linked vessels for a year.
Meanwhile, data showing China’s producer price deflation eased in October and consumer prices returned to positive territory due to efforts to curb overcapacity and cut-throat competition among firms, also boosted sentiment.
However, price gains were curbed by pressure from lower demand amid wider production cuts triggered by losses.
That came even as some regions in northern China, including key steel production hub Tangshan, lifted environmental protection-led production controls from Sunday.
Resilient raw material prices and softening downstream demand have squeezed steel margins, propelling some mills to start equipment maintenance, said analysts.
Iron ore inventory at major Chinese ports rose 2.1% to 138.44 million tons – the highest since March 21 – as of November 7 from the previous week, data from consultancy SteelHome showed.
Coking coal NYMEX:ACT1! and coke (DCJcv1), other steelmaking ingredients, slid 1.02% and 1.19%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange bucked the downtrend. Rebar RBF1! added 0.26%, hot-rolled coil EHR1! nudged up 0.06%, stainless steel HRC1! advanced 0.28% while wire rod (SWRcv1) shed 0.12%.
Source: Reuters