BEIJING- Iron ore futures retreated on Friday as falling hot metal output weighed on sentiment, but prices were still headed for a second consecutive weekly gain on lingering hopes for more stimulus from top consumer China.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 2 percent lower at 845.5 yuan ($116.3) a metric ton, after hitting a more than one-month high on Thursday.
The contract posted a rise of 3.2 percent week-on-week.
The benchmark August iron ore on the Singapore Exchange fell 3.3 percent to $110.2 a ton, a rise of 3.6 percent so far this week.
Prices of the key steelmaking ingredient surrendered some gains from earlier this week, following a wave of profit taking amid lower hot metal output, a blast furnace product which is typically used to gauge ore demand.
Average daily hot metal output among steelmakers surveyed fell for a second straight week by 0.1 percent on the week to about 2.39 million tons as of July 4, data from consultancy Mysteel showed.
A rally in iron ore price recently suppressing margins among some steelmakers also added to market caution, analysts said.
“Some mills showed less interest in ramping up output after suffering losses. And we expect limited upside room for hot metal output ahead,” analysts at Galaxy Futures said in a note.
