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Iron ore futures slump over 3% as supply outlook brightens

Iron ore futures slump over 3% as supply outlook brightens


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Published on date 15th Oct 2020.


MANILA, Oct 14 (Reuters) - Iron ore futures fell more than 3% to two-week lows on Wednesday as outlook brightened for supply of the steelmaking raw material to China, the world’s top steel producer.


The most-traded iron ore for January 2021 delivery on China’s Dalian Commodity Exchange declined as much as 3.2% to 792 yuan ($117.50) a tonne, its lowest since Sept. 30.


Iron ore’s November contract on the Singapore Exchange dropped 3.1% to $113.25 a tonne, extending losses into a third session.


Iron ore restocking demand from Chinese steel mills has faded after the Oct. 1-8 holidays, analysts said. Benchmark 62% iron ore`s spot price settled at $123.50 a tonne on Tuesday, compared with $125 the day before, according to SteelHome consultancy. SH-CCN-IRNOR62


“Iron ore prices will be under downward pressure due to improved effective supply associated with stronger shipments and slightly quicker offloading process (at China’s ports),” said Richard Lu, a senior analyst at CRU in Beijing.


China’s iron ore imports in September rose as supply from major miners increased and port congestion eased, with the coming months pointing to further solid supplies from key players Brazil and Australia.


China`s portside inventory piled up to 123.6 million tonnes last week, the highest since March 20, SteelHome data showed. SH-TOT-IRONINV


Coking coal fell 1.4% and coke slipped 0.5%, retreating from contract highs hit on Tuesday following unconfirmed reports that China had stopped buying coal from Australia.


“I have not seen any strong responses in terms of coking coal prices in both physical and futures markets,” Lu said.


“This is because import restrictions have been in place for almost two years, and some of the shipments that arrived earlier have not been unloaded yet.”


Construction steel rebar on the Shanghai Futures Exchange slipped 0.4%, while hot-rolled coil dropped 0.5% and stainless steel lost 0.4%.


 


Source :  https://in.reuters.com/


 





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