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Tuesday, January 31, 2023

Iron ore futures drop

MANILA: Benchmark iron ore futures fell in volatile trade on Wednesday, as COVID-19 disruptions and lingering concerns about weak real estate market in China outweighed optimism around Beijing’s policy U-turn on containing outbreaks and economic stimulus.

The most-traded May iron ore on China’s Dalian Commodity Exchange ended morning trade 0.5% lower at 845 yuan ($122.71) a tonne, surrendering early gains.

On the Singapore Exchange, the steelmaking ingredient’s benchmark February contract was down 1% at $114.95 a tonne, as of 0433 GMT.

Reflecting persistently weak demand amid rising COVID cases — despite a slew of support measures for the ailing property sector — China’s home prices fell at a faster pace in December, according to a private survey.

“We maintain our view that underlying steel consumption from China’s property sector is unlikely to recover meaningfully in the next 3-6 months,” Citi analysts said in a Jan. 3 note.

“The property sector continues to face challenges. Job security and consumer confidence remain challenging and the current wave of COVID infections remains a headwind,” they said.

Other Dalian steelmaking inputs fell, with coking coal and coke down 2.6% and 1.5%, respectively. Steel benchmarks were mixed, with rebar on the Shanghai Futures Exchange down 0.6% and hot-rolled coil slipping 0.2%.

Stainless steel rose 2.1% as prices of raw material nickel rose in Shanghai and on the London Metal Exchange.

Overall sentiment, however, has been positive than in recent months. Iron ore’s spot prices have risen about 47% to around $117 a tonne this week from $80 levels in November.

Iron ore futures drop

Source: Brecorder

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