Iron ore futures prices fell from near three-week highs on Wednesday, with investors cautious ahead of data releases this week that could better indicate whether steel demand in China is showing signs of recovery.
The most traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) recouped earlier losses and closed unchanged at 754.5 yuan ($105.81) a tonne, after rising more than 3% in the previous session.
Singapore Exchange’s September benchmark iron ore fell 0.64% to $100.95 a tonne, after hitting an intraday high of $102.5 a tonne earlier in the session.
Both benchmark indexes hit three-week highs on Tuesday, after rising for two consecutive sessions.
“The valuation of the iron ore market has recovered slightly thanks to the persistent rise in prices, and futures prices of steel products and iron ore are slightly higher than their counterparts in the spot market,” said Cheng Peng, an analyst at Beijing-based Sinosteel Futures.
“A new uptrend will require further policy stimulus or a clear signal of recovery in downstream demand.”
This wave of price recovery was mainly driven by strong expectations of increased demand after factories resume production for the upcoming peak consumption season, analysts at Guotai Junan Futures said in a note.
Steel benchmarks on the Shanghai Futures Exchange were mixed. Rebar rose nearly 0.2%, wire rod gained nearly 0.9%, while hot-rolled coils fell nearly 0.2% and stainless steel lost 0.14%.
Other steelmaking ingredients on the Dalian Stock Exchange rose, with metallurgical coal and coke up 0.8% and 0.69% respectively.
Source: Terra
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