Dalian iron ore futures slid on Friday and ended the week lower, as rising year-end seaborne shipments and tepid Chinese demand weighed.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) TIO1! fell 1.01% to 785.5 yuan ($111.12) a metric ton. The contract ended the week 0.57% lower.
The benchmark January iron ore (SZZFF6) on the Singapore Exchange lost 0.92% to $103.3 a ton as of 0708 GMT. Although it remained on track to end the week 1.48% higher.
With iron ore shipments expected to increase near year-end, imported iron ore supply in top consumer China will loosen further in December with a marked rise in carrier arrivals, while demand for the steelmaking material is set to cool amid production cuts at steel mills, noted consultancy Mysteel.
Seaborne supply from top producer Brazil stood at nearly 34.5 million tons in November, up 2.93% year-on-year.
Still, positive macro-economic signals and anticipated restocking demand among steelmakers will lend some support, Mysteel added.
“We see the iron ore market in a large surplus this year and see this surplus building over the next few years. With Simandou online and China steel output on a structural decline, prices will eventually trade on fundamentals and trend closer to costs,” said analysts from Citi.
The Simandou iron ore mine project is set to be the world’s largest mine for the highest grade of iron ore, key to the green transition in the global steel value chain, with projected annual production capacity of 120 million metric tons.
Other steelmaking ingredients on the DCE lost ground, with coking coal NYMEX:ACT1! and coke (DCJcv1) down 2.31% and 3.15%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were mixed. Rebar RBF1! dipped 0.09% and hot-rolled coil EHR1! closed flat, while wire rod (SWRcv1) rose 1.12% and stainless steel HRC1! firmed 0.52%.
Source: Reuters
