Dalian iron ore futures gave up early gains on Tuesday to close slightly lower, as prospects of softer global demand for steel and weaker Chinese economic data outweighed hopes of further stimulus from the world’s top consumer of metals.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime 0.38% lower at 791.5 yuan ($111.26) a metric ton.
The benchmark November iron ore SZZFX4 on the Singapore Exchange was 1.43% lower at $106.05 a ton.
Global steel demand is expected to decline in 2024 for the third year running as manufacturing and economic growth remain weak, the World Steel Association said on Monday as it downgraded its outlook.
Chinese steel demand is expected to fall by 3% this year and a further 1% in 2025, the group said.
Recent economic data out of China, including the September trade and new lending figures, has missed expectations, raising concerns that the economy may not reach the 5% growth target this year and will struggle to fend off deflationary pressures.
Meanwhile, steel exports in September hit their highest since 2016, reaching 10.2 million tons, with year-to-date exports up 21% year-on-year, ANZ analysts said, citing customs data released on Monday.
“Resilient external demand lifted exports of steel, but any weakness in external markets will be a headwind,” ANZ analysts said in a note.
The trade data shows export demand may be softening, while sluggish domestic demand continues to drag imports, ING analysts said, adding that they continue to expect a solid fiscal stimulus push from Beijing.
Other steelmaking ingredients on the DCE lost ground, with coking coal DJMcv1 and coke DCJcv1 down 1.28% and 0.62%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were weaker. Stainless steel SHSScv1 lost about 1.2%, rebar SRBcv1 and hot-rolled coil shed around 0.7% each, and wire rod SWRcv1 ticked 0.4% lower.
Source: Reuters
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