By Enrico Dela Cruz
April 13 (Reuters) - Iron ore futures fell on Thursday
as pessimism spurred by tepid steel demand in China prevailed,
even as traders kept track of a strong cyclone that could
disrupt supply from the world's largest export hub for the
steelmaking ingredient.
Weakening steel prices in China indicated lacklustre demand
at a time when construction activity in the top iron ore
consumer is picking up, analysts said.
The most-traded September iron ore on China's Dalian
Commodity Exchange ended morning trade 2.6% lower at
773 yuan ($112.45) a tonne.
On the Singapore Exchange, iron ore's benchmark May contract was down 1.9% at $115.95 a tonne, as of 0340 GMT.
"Spot rebar prices have dropped to lows back to late
December, suggesting demand has indeed been softer even as CISA
(China Iron & Steel Association) data points to surging steel
production and falling steel product inventory," Westpac
analysts said in a note.
Daily crude steel output in China increased 29,600 tonnes,
or 1%, over the first 10 days of April from late March to 3.08
million tonnes on average, the highest since mid-June 2021,
based on Mysteel consultancy's survey of 247 mills.
A potential supply disruption could provide support to iron
ore prices, analysts said.
Meanwhile, cyclone Ilsa, which could hit Australia's
northwest region - home to Port Hedland - was on Thursday
upgraded to a category four storm - just below the strongest
category five.
Port Hedland is the world's biggest export point for iron
ore and is used by BHP Group Ltd , Fortescue Metals
Group Ltd and Hancock Prospecting.
Dalian coking coal and coke slipped 0.3%
and 0.4%, respectively.
On the Shanghai Futures Exchange, rebar fell as
much as 1.5% to its lowest since Dec. 20, while hot-rolled coil dipped 1.4% to its weakest since Feb. 8. Wire rod dropped 0.6% and stainless steel shed 0.8%.
(Reporting by Enrico Dela Cruz in Manila; Editing by Sonia
Cheema)
