Iron ore futures prices snapped a three-session winning streak on Thursday, with focus back to concerns over a supply glut in the fourth quarter amid robust shipment and weakening demand in top consumer China.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) closed daytime trade 0.32 per cent lower at 788.5 yuan ($110.83) a metric ton, after hitting a more than two-week high on Wednesday.
The benchmark December iron ore on the Singapore Exchange was down 0.38 per cent at $103.95 a ton, as of 0742 GMT.
Shipments of the key steelmaking ingredient to China have been robust with November imports expected to stay above 100 million tons for a sixth straight month, keeping China’s total imports for the year on track for a new record.
Also, the massive Simandou iron ore project in Guinea began production last week, beefing up the anticipation of growing supply in the coming years.
By contrast, hot metal output, a gauge of iron ore demand, will likely fall in coming weeks, piling pressure on prices of raw materials, analysts at broker Galaxy Futures said in a note.
Additionally, China left benchmark lending rates unchanged on Thursday for the sixth consecutive month in November, meeting market expectations.
Prices pared some earlier losses in the afternoon trading after a Bloomberg report that China weighed new property stimulus package lifted sentiment.
Coking coal and coke, other steelmaking ingredients, extended declines for a third straight session, down 3.17 per cent and 0.7 per cent, respectively, dragged by expectations of sagging demand and rising supply.
Steel benchmarks on the Shanghai Futures Exchange languished. Rebar fell 1.01 per cent, hot-rolled coil shed 0.55 per cent, wire rod dipped 0.42 per cent and stainless steel lost 0.45 per cent.
