Iron ore futures prices slipped on Wednesday, as supply concerns eased and demand slowed marginally due to maintenance of more furnaces by steelmakers in top consumer China.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 2.63% lower at 778.5 yuan ($106.86) a metric ton, the lowest level since Nov. 27.
The benchmark January iron ore on the Singapore Exchange lost 1.57% to $102.9 a ton by 0736 GMT after hitting the lowest since Dec. 9 at $102.6 a ton.
BHP BHP.AX, one of the world’s leading iron ore suppliers, resumed operations at two mines in Western Australia after a pause due to heavy rains, alleviating supply worries.
“The ore price movement reflects pricing in of eased supply worries following the news,” said Pei Hao, an analyst at international brokerage Freight Investor Services (FIS).
Iron ore also came under pressure from thinning steel margins and environmental protection requirements, analysts at Galaxy Futures said in a note.
Prices are expected to move between $100 and $110 a ton factoring in winter restocking demand among steelmakers, analysts at Huatai Futures said.
Analysts at Macquarie said 33% of surveyed mills plan to increase purchases of iron ore over the next month, versus 28% earlier.
Other steelmaking ingredients on the DCE lost ground, with coking coal DJMcv1 and coke DCJcv1 down 2.45% and 2.79%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were weaker. Rebar SRBcv1 shed 1.55%, hot-rolled coil SHHCcv1 slid 1.2%, wire rod SWRcv1 dipped 0.28% and stainless steel SHSScv1 edged down 0.54%.
The ferrous market was broadly weaker despite a Reuters report that Chinese leaders agreed last week to raise the budget deficit to 4% of the grossdomestic product next year, its highest on record, while maintaining an economic growth target of around 5%.
Source: Reuters
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