SINGAPORE- Iron ore futures fell for a third session on Tuesday, weighed by climbing stockpiles of the steelmaking ingredient and disappointment with the lack of further monetary stimulus from top consumer China.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 1.84 percent lower at 746.5 yuan ($101.85) a metric ton.
The benchmark February iron ore on the Singapore Exchange was 0.61 percent lower at $96 a ton.
“Iron ore markets have been floored by…a week-on-week increase in arrivals of cargoes in Chinese waters, likely to amplify already burgeoning portside inventories,” said Atilla Widnell, managing director at Navigate Commodities.
A protracted supply surplus in the country’s iron ore market will keep China’s prices for imported iron ore under downward pressure this year, Chinese consultancy Mysteel said in a note.
Global ore miners will continue to ramp up production while demand for the raw material among Chinese mills is likely to shrink further, Mysteel added.
Meanwhile, bullish traders who had been pricing in a year-end Chinese rate cut have now realized that China’s central bank may not act on rates till March, Widnell added.
