MANILA: Iron ore futures languished on Monday as benchmark prices slumped below $ 100 a tonne due to weak Chinese demand and swelling stocks of steel raw materials at the port , but optimistic data for the country’s exports in October provided some support.
The most-traded iron ore in January on China’s Dalian Commodity Exchange slipped 0.1% to 562 yuan ($ 87.84) per tonne at 2:40 a.m. GMT, slashing initial losses but was down for an eighth consecutive session.
The December iron ore contract on the Singapore Stock Exchange fell 1.5% to $ 90.10 a tonne, after initially trading at $ 89.45. The 62% iron ore to be delivered to China by the main Australian supplier traded at $ 94.50 a tonne on Friday, the lowest since May 2020, according to advice from SteelHome. Atilla Widnell, managing director of Singapore-based Navigate Commodities, said it updated its short-term target price to $ 97.92- $ 101.16 per tonne CFR China for the fourth quarter, from a range earlier from $ 76 to $ 98.
Weekly shipments from Australia and Brazil fell by around 4.5 million tonnes last week as prices fell, after rising in previous weeks. “The significant drop in Australian shipments may be an indication that production from high marginal cost producers may now be feeling the effects of relatively low iron ore prices,” he said. Imported iron ore stored in Chinese ports stood at 145.10 million tonnes last week, the highest since April 2019, according to data from SteelHome.
Sales of iron ore also appeared to ease after data on Sunday showed export growth for China’s top steel producer and supplier slowed in October but exceeded expectations as demand world exploded before the winter holidays. Structural steel rebar on the Shanghai Futures Exchange rose 4.6%, but hot-rolled coils fell as much as 1.9%. Stainless steel climbed 1.2%. Dalian coking coal fell 0.4% but coke rose 0.3%.