SINGAPORE- Dalian iron ore futures extended their decline to a second straight session on Tuesday, with investors exercising caution while awaiting a clear signal of demand recovery in top consumer China.
The most-traded May iron ore on China’s Dalian Commodity Exchange fell 0.56 percent to 881.5 yuan ($122.46) per metric ton.
Some Chinese steelmakers have postponed plans to resume production amid pressure from poor steel margins or even losses, analysts at consultancy Mysteel said in a note.
“The market is waiting for a direction from the macroeconomic expectation, and in the face of a weak reality for the moment, it’s worth tracking how steel demand recoveries,” analysts at Everbright said in a note.
China’s crude steel production declined 6.9 percent from the prior year to 77.2 million tons in January, data from the World Steel Association showed.
However, the benchmark March iron ore on the Singapore Exchange was 0.15 percent higher at $115.6 a ton, finding some support from a potential export tax on Indian low-grade iron ore.
India is considering an export tax on low-grade iron ore after small steel producers urged the government to curb its overseas sales, Reuters exclusively reported on Monday, citing two sources directly involved in the matter.
China typically accounts for more than 90 percent of overall shipments of iron ore from India, which is the world’s fourth-largest producer of the steel-making ingredient. – Reuters
