Dalian and Singapore iron ore futures fell to a more than four-month low on Tuesday as sluggish steel demand in China prompted mills to curb output, raising the possibility of an oversupply of the steelmaking raw material.
The most-traded September iron ore on China’s Dalian Commodity Exchange fell as much as 1.5 percent to 713.50 yuan ($103.31), its weakest since Dec. 21. It was down 0.8 percent at 719 yuan.
Iron ore’s benchmark May contract on the Singapore Exchange, also dropped by up to 1.5 percent to hit $102.35 a ton, its lowest since early December.
Some mills in top steel producer China now hurting from lackluster steel demand and a slump in prices “have started to actively limit production”, Sinosteel Futures analysts said in a note.
According to industry consultancy and data provider Mysteel, some 52 of 126 blast furnaces in Tangshan, China’s top steelmaking city, have gone into maintenance.
Spot 62 percent-grade iron ore for delivery to China dropped to $110 a ton on Monday, the lowest since early December and down nearly 9 percent this week, according to SteelHome consultancy.
While China’s infrastructure investment rose 8.8 percent year-on-year in the first quarter, property investment fell 5.8 percent.
China’s infrastructure sector may continue to benefit this year from the projects initiated at the end of 2022, although growth may weaken in 2024 if no large-scale projects begin this year, the World Steel Association said in a quarterly report last week. – Reuters
