By Enrico Dela Cruz
Feb 3 (Reuters) - Dalian iron ore futures dipped on
Friday, deepening weekly losses as traders reassessed demand
prospects in top steel producer China and exercised caution
after market regulators repeatedly warned against excessive
price speculation.
The steelmaking ingredient's most-active May contract on
China's Dalian Commodity Exchange ended morning trade
1.1% lower at 847 yuan ($125.59) a tonne, after earlier hitting
a fresh two-week low of 834 yuan. The contract has declined 1.1%
so far in the week.
On the Singapore Exchange, benchmark March iron ore was headed for its first weekly fall this year, but up 0.1% at
$124.25 a tonne from Thursday.
"Whether the peak season of terminal demand can support the
current price still needs further observation," Sinosteel
Futures analysts said in a note.
Iron ore and steel prices in China hit multi-month highs in
January as markets rallied from November, underpinned by
stepped-up policy support for the country's ailing property
sector and the dismantling of strict COVID-19 curbs.
But the rally in iron ore prices has caught the attention of
Chinese regulators, who are apparently on guard to curb any
potential upward pressure on commodity inflation.
"Iron ore is facing pressure from price control, so pay
attention to policy risks," Sinosteel analysts said.
Supply-side risks also weighed on market sentiment.
Inventories of imported iron ore at China's 45 major ports
climbed to a four-month high of 137.3 million tonnes, based on
the Jan. 20-27 survey by industry data provider Mysteel, up 5.2
million tonnes, or 4%, from the prior survey period, mainly due
to a slump in discharge volumes and more ore arrivals.
Other Dalian steelmaking inputs were also lower, with coking
coal and coke down 0.2% and 2%, respectively.
Steel benchmarks on the Shanghai Futures Exchange also fell,
with rebar shedding 1.4%, hot-rolled coil dipping 1%, wire rod down 1%, and stainless steel dropping 1.3%.
(Reporting by Enrico Dela Cruz in Manila; Editing by Subhranshu
Sahu)
