Singapore iron ore futures dipped on Thursday, while the Dalian benchmark for the steelmaking ingredient stalled, as softening steel prices amid weak demand in China weighed on sentiment.
Worries about Chinese steel production cuts are also curbing iron ore prices, which posted the biggest monthly gains so far in 2023 in June supported by hopes for additional stimulus to support China’s sputtering post-COVID economic rebound.
Some steel mills in China’s southwest Sichuan province had received verbal notice about restriction on electricity use, according to consultancy and industry data provider Mysteel.
That adds to concerns about iron ore demand prospects, just as China’s top steel-producing city of Tangshan ordered an output cut for July amid deteriorating air quality.
Unfavorable weather conditions in China could also hamper steel production.
Weather forecasters on Thursday issued a string of heat advisories across northern parts of the country as temperatures were expected to breach 40 degrees Celsius (104 degrees Fahrenheit) in some areas, while raging rain and flooding continued elsewhere in China.
