Iron ore extends fall on persistently weak fundamentals in China

RecycLiCo Battery Materials

11/03/2024 04:33

BEIJING, March 11 (Reuters) - Iron ore futures prices
extended their decline into a second straight session on Monday,
to the lowest in more than four months, dragged down by the
persistently weak fundamentals of the key steelmaking ingredient
in top consumer China. 
    The most-traded May iron ore contract on China's Dalian
Commodity Exchange (DCE)  DCIOcv1  ended morning trade 3.81%
lower at 845 yuan ($117.52) a metric ton, the lowest since Oct.
24, 2023.
    The benchmark April iron ore  SZZFJ4  on the Singapore
Exchange slid 4.28% to $110.25 a ton, as of 0355 GMT, the lowest
since Oct. 10.
    A temporary supply glut as a result of better-than-expected
shipments so far in the first quarter of the year and
weaker-than-expected demand recovery has put intense downward
pressure on prices, analysts said.
    "The global ore shipments have climbed to a relatively high
level. The recent ore price fall has not triggered a production
reduction among non-mainstream suppliers," analysts at Citic
Futures said in a note.
    "Some mills postponed again the timing of production
resumption, curbing ore demand rise and destocking at ports,"
they added.
    Poor profitability among steelmakers dented their interest
in ramping up output, and the weakness in the steel market
permeated into the upstream raw materials market, weighing on
ore prices, analysts at Everbright Futures said in a note. 
    Other steelmaking ingredients on the DCE lost ground, with
coking coal  DJMcv1  and coke  DCJcv1  down 2.13% and 1.66%,
respectively.
    Steel benchmarks on the Shanghai Futures Exchange were
similarly weaker. Rebar  SRBcv1  slipped 1.87%, hot-rolled coil
 SHHCcv1  shed 1.51%, wire rod  SWRcv1  fell 1.65% and stainless
steel  SHSScv1  edged down 0.51%.   
    The weakness in the ferrous market came despite Chinese
regulators asking large banks to step up support for Vanke, a
state-backed property developer. 
    Property market in China, the largest steel consumer, has
been hit hard by a debt crisis and not yet shown obvious signs
of improvement despite various measures introduced by Beijing to
revive the sector. 


($1 = 7.1901 Chinese yuan)

 (Reporting by Amy Lv and Andrew Hayley; Additional reporting by
Zsastee Ia Villanueva; Editing by Mrigank Dhaniwala)
 ((Amy.Lv@thomsonreuters.com;))