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Friday, February 3, 2023

Iron ore futures down

MANILA: Dalian and Singapore iron ore futures fell on Monday after China’s state planner vowed to ramp up efforts to regulate prices of the steelmaking ingredient and crack down on “malicious” price speculation.

The National Development and Reform Commission is highly concerned about fluctuations in iron ore prices after noticing a recent sharp rise, it said in a statement on Friday.

The most-traded May iron ore contract on China’s Dalian Commodity Exchange was down 2.7% at 821 yuan ($120.98) a tonne, as of 0532 GMT.

The benchmark contract climbed to 860.50 yuan a tonne last week on optimism around top steel producer China’s stepped-up policy support for its ailing property sector and dismantling of pandemic controls.

But the first week of 2023 also saw increased market volatility amid worries about COVID-19 outbreaks in China and seasonally weak domestic steel demand. On the Singapore Exchange, the benchmark February iron ore contract shed 1.6% to $115.90 a tonne.

“One can understand the reason why it’s frustrating for the government, given that (high prices) increase costs for integrated steel producers and downstream end users i.e. property developers,” said Navigate Commodities Managing Director Atilla Widnell.

Iron ore futures “have dislocated from physical supply and demand”, he said. Steel benchmarks and other Dalian steelmaking inputs, however, rose, with coking coal and coke up 3.3% and 3.4%, respectively. Rebar on the Shanghai Futures Exchange gained 0.7%, hot-rolled coil climbed 0.6%, wire rod added 0.5%, and stainless steel rose 2.3%.

“We anticipate the prospective upside for Shanghai rebar futures will be relatively limited compared with other components of China’s bulk ferrous complex in the coming weeks,” Widnell said. Steel producers should soon start ramping up output to meet restocking needs ahead of, during, and after the Chinese New Year in late-January, he said.

Iron ore futures down

Source: Brecorder

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