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Dalian, SGX iron ore slump to over 4-month lows
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China steel mills curb output amid weak demand
(Updates prices)
By Enrico Dela Cruz
April 25 (Reuters) - Dalian and Singapore iron ore
futures fell to a more-than-four-month low on Tuesday as
sluggish steel demand in China prompted mills to curb output,
raising the possibility of an oversupply of the steel-making raw
material.
The most-traded September iron ore on China's Dalian
Commodity Exchange ended daytime trade 1.9% lower at
711 yuan ($102.85) a tonne, having earlier hit 710.50 yuan, its
weakest since Dec. 20.
Iron ore's benchmark May contract on the Singapore Exchange,
dropped 0.8% to $103.05 a tonne. It earlier hit $102.35, its
lowest since early December.
Some mills in top steel producer China now hurting from
lacklustre steel demand and a slump in prices "have started to
actively limit production", Sinosteel Futures analysts said in a
note.
According to industry consultancy and data provider Mysteel,
some 52 of 126 blast furnaces in Tangshan, China's top
steelmaking city, have gone into maintenance.
Spot 62%-grade iron ore for delivery to China dropped to $110 a tonne on Monday, the lowest
since early December, and down nearly 9% this week, according to
SteelHome consultancy.
While China's infrastructure investment rose 8.8% year-on-year in the first quarter, property investment fell 5.8%. China's infrastructure sector may continue to benefit this year from the projects initiated at the end of 2022, although growth may weaken in 2024 if no large-scale projects begin this year, the World Steel Association said in a quarterly report last week. The country's manufacturing sector is expected to show only a moderate recovery in 2023-2024, with slowing exports, the Brussels-based group said. Rebar on the Shanghai Futures Exchange fell 1.6%, hot-rolled coil also shed 1.6%, while wire rod climbed 2.5% and stainless steel gained 0.4%.
Coking coal and coke on the Dalian exchange declined 1% and 2.3%, respectively.
(Reporting by Enrico Dela Cruz in Manila; editing by Eileen
Soreng and Sohini Goswami)
