BEIJING- Dalian and Singapore iron ore futures extended losses on Wednesday, with demand prospects temporarily weighed down by China’s consideration to cut its crude steel output by around 2.5 percent.
The target was proposed by policymakers at a meeting last week but it has not yet been finalized, said sources familiar with the matter, adding that some officials at last week’s meeting said a cut of 2.5 percent was too high as the economy was still recovering and the target was expected to be set before the end of June.
The most-traded May iron ore futures contract on the Dalian Commodity Exchange (DCE) traded 1.47 percent lower at 871.5 yuan ($126.54) a ton, its lowest since February 15.
On the Singapore Exchange, the benchmark April iron ore was 1.53 percent lower at $121.6 a ton as of 0222 GMT, the lowest since Feb. 14.
“The news [of crude steel output cuts] may provoke worry in the raw materials market in the short run,” said Kevin Bai, a Beijing-based steel analyst at consultancy CRU group.
Likewise, prices of other steelmaking ingredients such as coking coal and coke slipped further with the former declining 1.68 percent and the latter falling 1.24 percent. – Reuters
