March 27, 2024 (MLN): Iron ore futures prices extended losses on Wednesday, pressured by persistent concerns about demand in top consumer China amid a lack of significant policy measures to boost steel uptake, as Reuters reported.
The most-traded May iron ore contract on China's Dalian Commodity Exchange (DCE) ended morning trade 2.69% lower at 812.5 yuan ($112.41) a metric ton.
The benchmark April iron ore on the Singapore Exchange was 1.09% lower at $103 a ton, as of 08:24am PST.
"A weak steel price and thin steel margins, coupled with high ore shipments, have suppressed ore demand and prices," Cheng Peng, a Beijing-based analyst at Sinosteel Futures, said.
Average daily hot metal output in April is expected at between 2.25 million and 2.26m tons, much lower than the 2.45m tons in the same period a year before, analysts at consultancy Mysteel said in a research note on Tuesday.
Pressure on ore prices from the supply side persisted in the short term as both overseas ore shipments and domestic ore arrivals rebounded this week, analysts at Huatai Futures said in a note.
"Also, there is an expectation of more shipments from Australia and Brazil with the approaching of the end of this quarter," they said.
The persistent weakness came despite better-than-expected industrial data.
Profits at China's industrial firms jumped 10.2% in the first two months from the same period last year, following a 2.3% profit decline for the whole of 2023, official data showed on Wednesday.
Other steelmaking ingredients on the DCE also retreated further, with coking coal and coke down 0.88% and 2.3%, respectively.
Lower raw material prices and soft demand dragged down steel benchmarks on the Shanghai Futures Exchange.
Rebar lost 1.3%, hot-rolled coil shed 0.98%, wire rod fell 1.56% and stainless steel dipped 0.11%.
"Steel demand is currently much weaker than the same period a year before, and a destock is slow," Sinosteel's Cheng said.
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Posted on: 2024-03-27T10:32:35+05:00
