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Iron ore slides on strong supply potential customers, weak steel demand outlook

Iron ore futures costs dropped on Wednesday, as Chinese traders returned after the nation's MidAutumn Celebration holiday to a bleak market outlook for the key steelmaking active ingredient, weighed down by potential customers of firm supply and soft steel need.

The most-traded January iron ore agreement on China's Dalian Product Exchange (DCE) ended morning trade 4.33%. lower at 673.5 yuan ($ 94.91) a metric lot.

The benchmark October iron ore on the Singapore. Exchange was 2.18% lower at $90.2 a heap, as of 0331 GMT.

Goldman Sachs on Monday cut its iron ore cost projection for. the 4th quarter of 2024, pointing out market oversupply although. need from China is stabilising.

We keep in mind potential rate assistance from pre-Golden Week. holiday restocking over the next 2 weeks, however a continuing. build in overall iron ore stocks is setting the scene for another. rate drop in October, analysts at the bank said in a note,. describing China's annual week-long holiday next month.

Throughout August, Chinese iron ore port stocks surged to a. fresh 29-month high while steel inventories at major mills grew. to a seasonal two-year high, Westpac experts said.

At the same time, steel mill success dropped to a. multi-decade low in late August, they added.

China's unrefined steel output in August decreased for the third. straight month, posting a 6.1% month-on-month loss and a 10.4%. fall from a year before, as steelmakers come to grips with losses. from a decline in steel prices.

The Biden administration on Friday locked in steep tariff. walkings on Chinese imports, consisting of a 25% responsibility on steel, which. takes effect on Sept. 27.

Other steelmaking components on the DCE published losses, with. coking coal and coke down 2.31% and 1.55%,. respectively.

Steel standards on the Shanghai Futures Exchange were. weaker. Hot-rolled coil dropped 1.35%, rebar. lost about 1.2%, wire rod shed 0.77%, and stainless. steel ticked 0.34% lower.

(source: Reuters)