BEIJING: Iron ore futures held in a tight range on Thursday as investors reassessed near-term demand prospects in top consumer China amid expectations of steel mills ramping up production despite lingering concerns about the property sector. The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.62% lower at 888 yuan ($123.41) a metric ton, as of 0215 GMT.
The benchmark March iron ore on the Singapore Exchange was 0.37% higher at $116.45 a ton, as of 0217 GMT. Chinese developer Country Garden said on Wednesday a liquidation petition had been filed, clouding its debt revamp prospects and undermining Beijing’s effort to restore confidence in the property sector, the largest steel consumer.
A slower-than-usual downstream demand recovery has dampened Chinese steelmakers’ enthusiasm in ramping up production after the week-long Lunar New Year holiday break, said analysts. “The country is entering its peak construction period, but there is little sign of steelmakers increasing output,” analysts at ANZ bank said in a note.
Daily consumption of sintered ore among steelmakers surveyed dropped by 0.8% on week to 1.06 million tons as of Feb. 29, data from consultancy Mysteel showed.
“A watchful stance prevailed with the approaching of the important meeting ore demand has not yet materially improved,” analysts at Shengda Futures said in a note, referring to China’s annual parliamentary meeting – the National People’s Congress.
Several market participants expect ore demand to rise in the coming weeks when mills have to restock to sustain production needs. “Hot metal output is already at a low level, so it’s more likely to pick up later compared to the possibility of a further decline,” said a Chinese analyst, requesting anonymity as he is not authorised to speak to media.
Source: Brecorder
