Iron ore falls on weak steel demand and fears of Chinese intervention

Iron ore futures on the Dalian and Singapore exchanges fell for a second session on Tuesday, weighed down by higher shipments, weak steel demand in the traditionally peak construction season and lingering concerns about government intervention.

“Current apparent (steel) demand is weaker than expected, putting downward pressure on the commodity market,” said a Tianjin-based iron ore analyst.

Market talk that China’s National Development and Reform Commission met with several futures companies in Beijing on Monday to discuss the iron ore market has raised fears of further government action against hoarding and speculative activities, analysts said.

May’s top-traded iron ore futures contract on the Dalian Commodity Exchange (DCE) ended the day trading down 2.06% at 881.5 yuan ($128.10) per ton, its lowest level since May 28. March.

On the Singapore Stock Exchange, benchmark iron ore fell 2.11% to $118.25 a ton in May after hitting a weekly low of $117.05.

Markets in China will be closed on Wednesday due to a public holiday.

Other steel raw materials, coking coal and coke saw sharp declines, dragged down by abundant supply and weak demand. Coking coal lost 3.51% and coke lost 4.21%.

Some plants in north China’s Hebei, Shanxi and Shandong provinces have successfully lowered coke purchase prices by RMB 50-100 per ton, consulting firm Mysteel shows.

“Spot prices have fallen as supply currently exceeds demand, also putting pressure on the futures market. We expect the second round of (Coke) price reduction proposals to come,” he says. a segment analyst.

Source: Terra

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