Iron ore futures prices extended their decline for a fourth straight session on Tuesday, undermined by the seasonally-weak steel demand in top consumer China, although improved steel margins and firm consumption for the key steelmaking ingredient curbed loss.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.69% lower at 795.5 yuan (USD 109.53) a metric ton, as of 0252 GMT.
The benchmark July iron ore on the Singapore Exchange was 0.19% lower at USD 102.4 a ton.
Iron ore prices have been under downward pressure as steel demand remained weak and expectations of a steel output cut lingered, analysts at SOOCHOW Futures said in a note.
Analysts at Maike Futures cited high portside stocks as another headwind for iron ore.
“Despite the persistent price fall, some traders are still holding confidence in the market amid the remaining high hot metal output as that means at least in the short term, ore demand will be firm,” said a North China-based trader, requesting anonymity as he is not authorised to speak to the media.
Data from consultancy Shanghai Metals Market showed that hot metal output will likely see another rise this week.
Also, boosting sentiment to some extend is news that China’s state planner said on Monday that it was urging local governments to ease car purchase restrictions.
Other steelmaking ingredients on the DCE fell, with coking coal and coke down 0.81% and 0.32%, respectively.
Steel benchmarks on the Shanghai Futures Exchange ticked down. Rebar retreated 0.42%, hot-rolled coil ticked 0.16% lower, wire rod shed 0.69% and stainless steel dipped 0.11%.
“Demand (for steel products) was not very well as heavy rains impacted both transportation and operations of construction sites,” said a south China-based steelmaker, adding that steel products are more likely to get rusted in rainy weather.
