Iron ore futures prices were stuck in a tight range on Thursday as traders weighed high portside inventories and prospects of crude steel output cuts in top consumer China against production resumption at some steelmakers.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trade 0.36% lower at 824.5 yuan ($113.56) a metric ton.
The benchmark July iron ore SZZFN4 on the Singapore Exchange was down 0.33% at $106.95 a ton, as of 0705 GMT. It climbed more than 1% in the morning session, partly helped by a weaker U.S. dollar =USD.
China left benchmark lending rates unchanged at a monthly fixing, despite a flurry of recent data showing more support is needed to shore up an uneven economic recovery. On Monday, it had left a key policy rate unchanged.
Market participants in China are now looking for direction from the third plenum, a key meeting of the Chinese Communist Party’s central committee that will be held in July. The plenum is expected to focus on deepening reforms and promoting the modernisation of China.
Ore prices ticked higher in the morning session, with the market focus on sustained demand from production resumption by some mills, said analysts.
“Steel margins somewhat improved after steelmakers lowered coke procurement prices, leaving room for a rise in iron ore (prices),” analysts at Maike Futures said in a note, adding that the upside room would be relatively limited.
Other steelmaking ingredients on the DCE lost ground, with coking coal DJMcv1 and coke DCJcv1 down 1.89% and 1.64%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were mixed. Rebar SRBcv1 fell 0.85%, hot-rolled coil SHHCcv1 shed 0.55%, wire rod SWRcv1 was little changed, while stainless steel SHSScv1 added 0.68%.
“Downstream steel consumption has obviously diminished with high temperature and heavy rains hitting many regions; steel traders took a cautious stance, focusing on destocking,” analysts at Everbright Futures said in a note.
Source: Reuters