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Sunday, February 25, 2024

Iron ore rangebound as investors await clear direction

BEIJING: Iron ore futures were wedged in a tight range on Monday, as investors exercised caution on mixed signals.

Resilient demand and worry on tight supply supported prices while expectation of reduced demand because of production restriction in top-consumer China capped gains.

The most-traded January iron ore on China’s Dalian Commodity Exchange (DCE) edged up 0.31% to 972 yuan ($136.25) a metric ton, as of 0215 GMT.

The benchmark January iron ore on the Singapore Exchange was little moved at $131.5 a ton, as of 0221 GMT.

Iron ore set for first weekly loss in seven as China monitors prices

The daily discharging volumes from major ports climbed by 1.4% week-on-week to around 3.06 million tons as of Dec. 1, data from consultancy Mysteel showed.

“The iron ore project pipeline has dried up as developers faced the prospect of weak demand from China. This is likely to keep the market tight for the foreseeable future,” analysts at ANZ Bank said in a note.

The expectation of falling demand in the short-term following the latest production restrictions in north China, coupled with squeezed steel margins and fears of enhanced intervention from authorities capped price gains.

A few cities in northern China, including the country’s top steel production hub Tangshan, started a level 2 emergency response amid forecast of heavy air pollution over the weekend.

“Rising raw materials have prevented steel margins from expanding, which dented mills interest in restocking,” analysts at Huatai Futures said in a note.

“Some mills have implemented annual maintenance on their blast furnaces,” they added.

Other steelmaking ingredients posted losses, with coking coal and coke on the DCE down 3.56% and 3.36%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were broadly lower. Rebar dipped 0.71%, hot-rolled coil fell 0.52%, stainless steel shed 0.51% while wire rod added 2.44%.

The market awaits a batch of import and export data due this Thursday for directions.

Iron ore rangebound as investors await clear direction

Source: Brecorder

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