Dalian and Singapore iron ore futures fell on Monday, hovering around their lowest in more than two weeks, as traders curbed their optimism about demand prospects in top steel producer China.
Caution over regulatory risks prevailed, with Chinese authorities having warned against excessive speculation on iron ore prices following the steelmaking ingredient’s recent rally underpinned by China’s reopening and property sector support measures.
The most-traded iron ore, for May delivery, on China’s Dalian Commodity Exchange fell as much as 1.2 percent to 836 yuan ($123.30) a ton, declining for a fifth straight session.
On the Singapore Exchange, iron ore’s benchmark March contract slumped 3 percent to $121.15 a ton, its weakest since Jan. 18.
In the spot market, the 62 percent Fe ore bound for China was assessed at $127 a ton on Friday, based on SteelHome consultancy data. The benchmark grade hit its highest since mid-June at $130.50 on Jan. 30.
“We expect to witness some immediate downside for iron ore prices this coming week, as supply- and demand-side fundamentals temporarily loosen,” Navigate Commodities Managing Director Atilla Widnell said.
Steel demand in China has yet to pick up after the Lunar New Year holidays, partly indicated by rising inventories, analysts said.
Traders were seen waiting for signals of further policy support for the Chinese economy.
However, China’s policymakers have ruled out flood-like stimulus even as they plan to show more support for domestic demand this year.
Widnell said an increase of 1.88 million tons in iron ore shipments to China from Australia and Brazil last week could also weighed on prices. — Reuters
