Iron ore price falls for a third week on China demand woes
Iron ore futures rose for a second straight session on Friday, supported by higher-than-expected hot metal output, although demand concerns and high portside stocks in top consumer China pushed prices down for a third straight week.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 1.97% higher at 827.50 yuan ($114.05) a metric ton. However, the contract has dropped 1.7% for the week so far.
The benchmark July iron ore on the Singapore Exchange climbed 0.23% to $107.1 a ton, as of 0718 GMT.
Average daily out for hot metal among steelmakers surveyed climbed by 1.5% from the previous week to 2.39 million tons as of June 14, the highest since November 2023, data from consultancy Mysteel showed, beating expectations.
Hot metal is a blast furnace product and a key indicator of ore demand.
Additionally, China’s central bank held a meeting on Wednesday to promote its financial support for affordable housing in a bid to accelerate sales of unsold housing stock, the latest effort to revive the embattled property sector.
“The China government is trying to revive the property sector with some resources deployed, but I think there will be some more measures which need to be deployed in the market to support it and to provide the consumer confidence,” said ANZ analyst Soni Kumari.
“The structural trends suggest that the market is going to see more subdued performance rather than substantial recovery. So every rally will be a selling opportunity.”
BMI Research said in a note that “a strong build-up of iron ore inventories at Mainland Chinese ports, rising to 147.3 mnt as of June 7, has the potential to place a cap on prices in the coming months.”
Other steelmaking ingredients on the DCE advanced, with coking coal and coke up 2.41% and 3.92%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange gained ground. Rebar rose 0.72%, hot-rolled coil added 0.74%, wire rod advanced 0.83% while stainless steel lost 0.57%. – Source: mining.com –