Iron ore dips as rising China port inventory adds pressure
Dalian and Singapore iron ore futures fell to three-week lows on Tuesday, as rising portside inventory in China weighed on prices already pressured by weak demand prospects.
The most-traded iron ore, for May delivery, on China’s Dalian Commodity Exchange DCIOcv1 ended daytime trade 0.7% lower at 840.50 yuan ($123.86) a tonne. It earlier dropped to 828.50 yuan, its lowest since Jan. 17.
On the Singapore Exchange, iron ore’s benchmark March contract SZZFH3 fell as much as 2.4% to $120.30 a tonne, its weakest since Jan. 18.
Imported iron ore stocked at Chinese ports was estimated at 136.5 million tonnes as of Feb. 3, the biggest since early December, SteelHome consultancy data showed.
“Rising iron ore inventory and steel products are reflecting weaker Chinese demand post the (Lunar New Year) holiday, with reopening now expected to impact the consumer more than construction/housing activity,” Westpac analysts said in a note.
Policymakers in top steel producer China plan to further boost support for domestic demand this year but are likely to stop short of splashing out big on direct consumer subsidies, Reuters reported, citing sources close to policy discussions.
Meanwhile, analysts said latest Chinese property market indicators showed a slow recovery of the sector that accounts for a sizeable portion of domestic steel demand, despite government support for developers.
“Top 30 cities property sales were massively lower compared to January last year and also lower than the same CNY holiday period in 2022. January existing home sales in Shanghai were also poor,” commodities broker Marex said in a note.
Other Dalian steelmaking inputs rose, with coking coal DJMcv1 up 1.1%, while coke DCJcv1 gained 0.6%.
Steel benchmarks fell, with rebar on the Shanghai Futures Exchange SRBcv1 down 0.5%, hot-rolled coil SHHCcv1 slipping 0.2%, and wire rod SWRcv1 shedding 0.8%. Stainless steel SHSScv1 dipped 0.4%.