"Steel mills continued to maintain relatively low (iron ore)inventories (at their own warehouses), which is especially the case after steel margins shrank rapidly following drastic (steel) price fall. Also, the pick-up in supply of steel scrap sent some pressure to iron ore," analysts at Sinosteel Futures said in a note. The recovery pace in downstream steel demand, steel prices performance as well as steel margins movement will jointly impact iron ore prices at the moment, analysts added. Forecasts of higher supply also added pressure on the iron ore market. "Top iron ore exporters are expected to increase their shipments in coming months as supply side disruptions ease. This comes following signs of weakening demand," analysts at ANZ bank said in a report.
Similarly, steel futures prices weakened further after
slower-than-expected demand undermined sentiment. Rebar on the
Shanghai Futures Exchange fell 1.21% to 4,075 yuan a
tonne, hot-rolled coil dipped 1.43%, wire rod slid 0.73%. Stainless steel edged up 0.16%.
Prices of the other steelmaking raw materials such as coking
coal and coke were mixed, with the former climbing
0.25% and the latter falling 0.24%.
($1 = 6.8441 Chinese yuan) (Reporting by Amy Lv and Dominique Patton in Beijing; Editing by Sherry Jacob-Phillips)
