Iron ore futures fell on Tuesday, snapping a two-day streak of gains, as uncertainty over fiscal stimulus plans in top consumer China weighed on the market, while heavy pressure on higher supply prospects put even greater pressure on prices.
The most-traded January iron ore contract on China’s Dalian exchange ended day trading 0.77% lower at 777.5 yuan ($108.89) per tonne.
Benchmark iron ore on the Singapore exchange rose slightly by 0.5% to $104 a tonne around 8am (Brasilia time).
Market sentiment fluctuates with political expectations, Chinese financial information site Hexun Futures said.
There is great political uncertainty as the Standing Committee of the National People’s Congress will meet in early November, coinciding with the US presidential election, Hexun Futures said.
The Dalian contract hit its highest value in more than a week on Monday, fueled by renewed hopes of fresh fiscal stimulus from Beijing.
The China Iron and Steel Association’s statement that it will propose specific policies to reshape the sector in the face of weak demand supported yesterday’s gains in steel and iron ore prices, analysts at ANZ said.
Although demand for iron ore remains stable, the market faces the issue of peak production and high supply, Hexun Futures said.
The total volume of iron ore shipped globally, from 19 ports and 16 mining companies in Australia and Brazil, increased by 1.7 million tonnes or 6.9% on the week, reaching 26.3 million tonnes between on October 21 and 27, according to Mysteel data.
Source: Terra
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