Make Kitco Your Homepage

Iron ore dips further on lingering risk-off sentiment

Kitco News

BEIJING, Nov 8 (Reuters) - Iron ore prices extended declines for a second session on Wednesday amid lingering risk-off sentiment, although a speech by China's central bank governor on support for the property market offset some of the earlier losses.

The most-traded January iron ore on China's Dalian Commodity Exchange (DCE) declined 0.27% to 923 yuan ($126.94) a metric ton, as of 0215 GMT.

The benchmark December iron ore on the Singapore Exchange was 0.58% lower at $122.35 a ton, as of 0239 GMT.

"Fears of enhanced government supervision on the market triggered a wave of risk-off sentiment, especially after latest moves made by the Dalian bourse," said Chu Xinli, a Shanghai-based analyst at China Futures.

The DCE announced on Monday to limit trading volumes and adjust up trading fee rates for some futures contracts of the key steelmaking ingredient.

Also, China's commerce ministry announced on Tuesday to require traders of some key commodities including iron ore to submit real-time information on shipments as part of efforts to stabilize trade.

"But since more production cuts might not be seen amid improved steel margins, indicating ore demand won't shrink significantly in the near term, supporting prices," Chu added.

Some earlier losses pared after Pan Gongsheng, China's central bank governor, said that spillover effect of property market adjustments on the financial system are generally manageable and will guide financial institutions to keep stable financing channels open through property credit and bonds, state media reported.

Other steelmaking ingredients on the DCE moved marginally, with coking coal ticking up 0.16% while coke was little changed.

Steel benchmarks on the Shanghai Futures Exchange dipped further. Rebar shed 0.42%, hot-rolled coil fell 0.28%, wire rod dropped 0.45% and stainless steel retreated 1.09%.

"The wide-scale cold waves that have hit many regions
slowed down construction activities, weighing on sentiment,"

analysts at Everbright Futures said in a note.
($1 = 7.2710 Chinese yuan)

(Reporting by Amy Lv and Dominique Patton in Beijing; Editing by Rashmi Aich)

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.