Singapore iron ore edged down on Tuesday, as caution dominated among traders after the latest Chinese manufacturing data missed expectations.
The benchmark November iron ore SZZFX3 on the Singapore Exchange was 0.1% lower at $121.6 a metric ton, as of 0847 GMT.
However, the January iron ore on China’s Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trading up 0.34% at 898.5 yuan ($122.80) a ton, after some downward correction earlier.
China’s manufacturing activity unexpectedly contracted in October, purchasing managers’ index (PMI) data showed, casting a cloud over recent indicators that showed a nascent recovery in the world’s second-largest economy.
The steel industry PMI slid to 45.6 in October from 45.8 previously, data from China Logistics Information Centre showed, forecasting further contraction in steel output in November, citing a typical production restriction in winter and pressure from narrowing margins.
Fear of intervention from government bodies following a rally in prices also sent further downward pressure to the market, analysts said.
“Demand remained weak with the market still facing the ‘strong expectation and weak reality’ and whether there will be an upward momentum later depends on how the stimulus landed,” analysts at Galaxy Futures said in a note.
There are growing supply risks, analysts at ING bank said in a note, pointing to the approval of industrial action plans among nearly 350 BHP iron ore rail workers in Australia that could include work stoppages of up to 24 hours.
Other steelmaking ingredients recorded losses, with coking coal DJMcv1 and coke on the DCE down 0.6% and 0.33%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were mixed. Rebar edged up 0.21%, hot-rolled coil was little changed, while stainless steel declined 1.02%, and wire rod shed 0.95%.
Source: Hellenic Shipping News
