BEIJING- Iron ore futures prices fell on Friday as a continuous fall in near-term China demand sparked renewed caution among investors, although expectations of improved intake in the coming peak construction season kept prices heading for a weekly gain.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 2.24 percent lower at 719.5 yuan ($100.81) a metric ton.
It posted gains of 1.8 percent week-on-week, but was still 23.2 percent lower from the beginning of the year.
The benchmark September iron ore on the Singapore Exchange was 1.18 percent lower at $96.2 a ton, a rise of 4.6 percent so far this week despite a fall of 26 percent from early January.
Output of hot metal, an indicator to gauge iron ore demand, continued its fall for a fifth consecutive week, showing that near-term ore consumption remained subdued, said analysts.
Average daily hot metal output among steelmakers surveyed fell 1.9 percent on the week to 2.24 million tons as of Aug. 23, the lowest since early April, data from consultancy Mysteel showed.
Widening losses among Chinese steel mills also weighed on buying appetite for the key steelmaking ingredient.
Profitability among steelmakers dropped for seven consecutive weeks to 1.3 percent from 4.76 percent previously, Mysteel data showed.
The weekly gain came as persistent and sharp price drops propelled a wave of dip buying, especially ahead of ‘golden September’, when downstream construction activities typically pick up.
