Benc hmar k iron ore futures pulled back on Tuesday after hitting four-week highs in the previous session, as weakening steel margins in top steel producer China weighed on raw material prices.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange fell as much as 1.8 percent to 1,042 yuan ($160.68) a ton.
Iron ore’s front-month contract on the Singapore Exchange dropped 1.8 percent to $167.26 a ton.
“Steel margins have been falling quickly in recent days. This would motivate some highcost steelmakers to conduct maintenance and consequently reduce iron ore consumption,” said Richard Lu, a senior analyst at CRU consultancy in Beijing.
However, restocking demand ahead of the Lunar New Year holidays is likely to provide some support to prices, along with heavy port congestions in China that have slowed unloading activity, he said.