Iron ore retreats as traders assess China demand
MANILA: Iron ore futures slipped on Tuesday, with the Dalian benchmark price pulling back from the previous session’s contract high, as traders assessed demand in top steel producer China while also keeping an eye on regulatory risks.
The steelmaking ingredient, however, was on track for a 2% monthly gain in the Dalian Commodity Exchange, and has risen 11% on the Singapore Exchange this month, extending a rally driven by improved demand prospects after China dismantled strict COVID-19 curbs.
The so-called China reopening has also boosted spot iron prices, with the benchmark 62%-grade material hitting the highest since June on Monday above $130 a tonne, SteelHome consultancy data showed. The most-traded May iron ore on the Dalian exchange was down 0.6% at 872 yuan ($129.09) a tonne, as of 0544 GMT.
SGX iron ore’s benchmark March contract shed 0.9% to $127 a tonne. “Iron ore prices may stay range-bound when steel mills resume production after the CNY (Lunar New Year) break,” industry consultancy and data provider Mysteel said in its latest weekly outlook.
Iron ore port stocks in China also likely accumulated after the week-long holiday, it said. Worries about regulatory intervention as China has warned against excessive market speculation were also seen curbing iron ore prices. “The risk of price regulation still exists,” analysts at Zhongzhou Futures said in a note.