Dalian iron ore dipped on Tuesday while the Singapore benchmark trimmed gains, as traders weighed China’s measures to revive its struggling property sector against the impact of likely steel output controls on demand for the steelmaking ingredient.
The benchmark January iron ore on China’s Dalian Commodity Exchange DCIOcv1 ended daytime trade 0.6% lower at 846.50 yuan ($116.03) per metric ton, after four straight sessions of gains.
On the Singapore Exchange, the most-traded October iron ore SZZFV3 was up 0.7% at $115.50 per ton, as of 0745 GMT, after earlier hitting $117.25, the contract’s strongest level since early-April.
A series of measures that Beijing recently announced to revive China’s faltering economic growth, including the easing of some borrowing rules to aid homebuyers, further lifted iron ore prices this month after their strong gains in August.
Investors were however urged to restrain themselves and be mindful of the anticipated steel production curbs this year in China, the world’s biggest iron ore consumer.
“The focus remains on steel production cuts, which will commence later this year, with the only question being when,” Westpac analysts said in a note.
China will continue to cap steel output this year, according to the general manager of state-owned Baosteel 600019.SS, confirming the continuation of a two-year-old zero-growth policy designed to limit the industry’s carbon emissions.
China’s crude steel output in January-July was up 2.5% versus the same period last year.
Steel benchmarks in Shanghai also fell. Rebar SRBcv1 dropped 1%, hot-rolled coil SHHCcv1 shed 0.7%, wire rod SWRcv1 dipped 0.6%, and stainless steel SHSScv1 lost 0.7%.
Other steelmaking ingredients on the Dalian exchange were firmer, but off session highs, with coking coal DJMcv1 rising 2.8% in its fifth straight session of gains amid strong demand and concerns of tight supply following recent mine safety checks in China.
Coke DCJcv1 climbed 0.7%.
Source: Hellenic Shipping News
