Iron ore futures fell on Thursday as Chinese authorities’ intervention to contain recent price increases weighed on sentiment, although prospects for improving demand limited losses.
Benchmark iron ore for December on the Singapore Exchange fell 1.46% to $132.7 a tonne, after hitting a nine-month high the previous day.
The most traded iron ore in January on the Dalian Commodity Exchange (DCE) closed daily trading 0.86% lower at 976.5 yuan ($135.42) a ton, after approaching the level psychological of 1,000 yuan a ton on Wednesday.
China’s state planner said Thursday it will closely monitor changes in the iron ore market and further strengthen supervision of spot and futures trading.
“This doesn’t necessarily mean the start of a downward trajectory, but at least prices will remain stagnant after these moves,” said Pei Hao, an analyst at Shanghai-based brokerage FIS.
However, price losses were limited by hopes of sustained demand amid improving steel margins and as steel mills began stockpiling raw materials to meet winter production needs, analysts said.
“The drop in daily production of hot metals could be mitigated by improving the profitability of steel mills,” analysts at Huatai Futures said in a note.
Other steelmaking ingredients gained ground despite failing to reverse course, with metallurgical coal holding steady while coke fell 0.25%.
Some Chinese coke plants have increased coke supply prices between 100 and 110 yuan per ton.
Source: Terra
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