Prices of iron ore futures fell on Tuesday, weighed down by concerns that demand for the key steelmaking raw material will slide, with steel demand in top consumer China showing signs of softening.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) surrendered some earlier losses to end daytime trade 0.52% lower at 762 yuan ($107) a metric ton.
The benchmark November iron ore on the Singapore Exchange was 0.98% lower at $100.8 a ton, as of 0722 GMT.
It fell below the key psychological level of $100 a ton to hit an intraday low at $99.8 earlier in the session.
Transaction volumes of construction steel products slipped nearly 8% from the day before to 122,500 tons on Monday, data from consultancy Mysteel showed.
Steel benchmarks on the Shanghai Futures Exchange fell. Rebar SRBcv1 shed 0.15%, hot-rolled coil SHHCcv1 lost 0.82%, wire rod SWRcv1 slid 3.04% and stainless steel fell 1.37%.
“After macro sentiment temporarily cooled, speculative demand has decreased significantly while the recovery of rigid demand is limited,” analysts at First Futures said in a note.
“Rebar is likely to build up inventories in November when demand will be weighed with weather getting colder (in the northern regions).”
Beijing has unveiled a raft of stimulus measures since late September to spur the economy and arrest price and sales slump in its property market.
That had lifted sentiment in the commodities markets, pushing iron ore and steel prices higher by 12% and 6%, respectively.
Other steelmaking ingredients on the DCE lost ground, with coking coal DJMcv1 and coke DCJcv1 down 1.22% and 0.75%, respectively.
Despite broad loss in the ferrous market, some analysts believe prices will move within a relatively narrow range as the market awaits further signals from an important meeting which will possibly be held later this month.
Source: Reuters (Reporting by Amy Lv and Mei Mei Chu; Editing by Rashmi Aich and Mrigank Dhaniwala)
