BEIJING- Prices for steelmaking ingredients on China’s Dalian Commodity Exchange dropped on Tuesday as latest control measures due to the recent surge in COVID-19 cases hurt transportation and production levels at mills and also dampened demand.
“Affected by the pandemic situation, downstream demand has been subdued, while the disrupted transportation has together led to increasing inventory at coking plants,” analysts with GF Futures wrote in a note.
Coke inventories at 230 coking plants stood at 11.5 million tons last week, up 1.1 percent from a week earlier, data from Mysteel consultancy showed.
As profit margins at steel mills are relatively low, GF Futures added there’s possibility for coke producers to cut prices.
The most-active coke futures on the Dalian bourse for May delivery was down 1.6 percent at 3,567 yuan ($560.67) a ton. Coking coal prices dropped 0.9 percent to 2,988 yuan per ton.
Benchmark iron ore futures on the Dalian exchange dipped 0.7 percent to 824 yuan a ton.
Portside iron ore stocks in China had been falling for four straight weeks to 155.8 million tons, as of March 20, according to Mysteel.
