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Dalian iron ore slumps more than 3%
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SGX iron ore sinks back below $100/T
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Shanghai steel benchmarks tumble
(Updates price changes throughout)
By Enrico Dela Cruz
May 11 (Reuters) - Iron ore dipped on Thursday, with
Dalian futures retreating from a more-than-two-week high and the
Singapore benchmark contract sinking back below $100 a tonne on
scepticism over prospects of demand recovery in China.
The most-traded September iron ore on China's Dalian
Commodity Exchange ended daytime trade 3.5% lower at
698.50 yuan ($101.05) a tonne. It climbed to 733 yuan on
Wednesday, its strongest since April 24.
On the Singapore Exchange, iron ore's benchmark June
contract was down 3.7% at $99.50 a tonne, as of 0720
GMT.
Prices of the steelmaking ingredient rebounded earlier this
week following cumulative heavy losses since last month.
The prices were propped up by expectations of expanded
stimulus for China's economy amid a patchy recovery and a
challenging outlook due to external headwinds.
Data on Thursday showed China's consumer prices rose at the
slowest pace in more than two years in April, while factory gate
deflation deepened, suggesting more stimulus may be needed to
boost an uneven post-COVID economic recovery.
Iron ore prices also received an extra boost from reports
that some of China's steel mills were set to resume production
following maintenance shutdown, and its confirmation of steel
output cuts, which supported steel prices and steel mills'
margins.
"We believe the rally in iron ore is unsustainable, as we
don't expect a quick turnaround in steel demand amid a weak
property market in China," Citi analysts said in a note.
Rebar on the Shanghai Futures Exchange shed 2.7%,
hot-rolled coil dipped 3%, wire rod slumped
4.5%, and stainless steel lost 1.4%.
Coking coal and coke on the Dalian exchange dropped 1.3% and 2.4%, respectively. Steel mills in North China's Hebei and East China's Shandong provinces lowered coke procurement prices by another 100 yuan a tonne on May 10, marking the seventh round of price cut since April, according to consultancy and data provider Mysteel.
(Reporting by Enrico Dela Cruz in Manila; additional reporting
by Amy Lv in Beijing; Editing by Nivedita Bhattacharjee and
Janane Venkatraman)
