Latest News

Iron ore declines as China's post-parade recovery of demand misses expectations

The price of iron ore futures fell on Friday as demand in China, the top consumer, missed expectations following the World War Two parade.

As of 0321 GMT, the benchmark October iron ore traded on Singapore Exchange was down by 0.82% to $103.95 per metric ton. On Thursday, the contract reached its highest level since 24 July.

As of 0331 GMT, the most traded January iron ore contract at China's Dalian Commodity Exchange added 0.13%. It now stands at 784.5 Yuan ($109.68). In the previous session it reached its highest level since the 14th of August, rising by 1.7%.

The average daily hot metal production, which is a measure of iron ore consumption, fell by 4.7% compared to the previous week, reaching 2.29 million tonnes in the week ending September 4, the lowest level since February 28.

The market participants expected that the output would fall more sharply this week, due to production restrictions in Tangshan's top steelmaking center, to prepare for the military parade to be held on September 3, to commemorate World War II.

Prices were supported by the expectation that demand would improve after steel mills resumed production on Thursday.

A fall of almost 5% caught some analysts and traders by surprise and weighed on sentiment and price.

Iron ore prices were also limited by the growing supply.

The Singapore contract, however, was headed for a second consecutive weekly gain, supported a weak dollar amid bets on a U.S. Federal Reserve interest rate cut.

Dollar-priced goods are cheaper when purchased in other currencies.

The Shanghai Futures Exchange saw a decline in steel benchmarks as the demand for steel remained low.

Rebar fell 0.1%, while hot-rolled coils dropped 0.06%. Stainless steel declined 1.12%, and wire rod remained unchanged.

Coking coal, coke and other steelmaking materials rose by 2.07% and 1,3% respectively on renewed supply concerns. $1 = 7.1529 Chinese Yuan (Reporting and editing by Amy Lv, Lewis Jackson)

(source: Reuters)