China’s iron ore prices fell for a fourth day on Friday amid expectations that the oncoming winter season will see reduced demand for the steelmaking raw material and as Sino-U.S. trade tensions eased.
The most traded iron ore contract on the Dalian Commodity Exchange, for January delivery, tumbled as much as 4.8 percent to a three-week low of 501.50 yuan ($72.76) a tonne in its biggest intra-day dip since June 19.
The contract closed down 3.5 percent at 508.50 yuan, notching a 4 percent loss for the week, its biggest weekly drop since the week ended May 25.
When China imposed import tariffs on $60 billion worth of U.S. goods, including iron ore, in August, the contract spiked by around 5 percent, even though U.S. ore accounts for relatively little of China’s imports.
The presidents of the United States and China both expressed optimism over resolving their trade dispute after a phone call on Thursday.
Chinese demand for top-quality iron ore from Brazilian miner Vale should stay strong, helping the company keep its prices above $90 per tonne in 2019, Chief Financial Officer Luciano Siani said.
Meanwhile, the most active construction steel rebar contract on the Shanghai Futures Exchange slipped for a fifth day, closing down 0.9 percent at 4,064 yuan a tonne after hitting a three-week low of 4,025 yuan a tonne.
Hot-rolled coil futures recovered from a more than 2 percent dip to close up 0.1 percent on 3,744 a tonne, snapping a four-day losing streak.
Blast furnace utilization rates at steel mills in China were down 0.69 percentage points at 67.54 percent this week, according to consultancy Mysteel. Northern China’s winter heating season, which will see tighter restrictions on industrial output, begins in the middle of this month.
“The physical industry is not good,” said Zhao Xiaobo, an analyst with Sinosteel Futures in Beijing, noting that the yuan had strengthened on Thursday, making iron ore imports cheaper for the world’s top steelmaker.
The yuan fell 0.4 percent on Friday afternoon, as the ferrous complex cut its losses.
The presidents of the United States and China both expressed optimism over resolving their trade dispute after a phone call on Thursday.
Chinese demand for top-quality iron ore from Brazilian miner Vale should stay strong, helping the company keep its prices above $90 per tonne in 2019, Chief Financial Officer Luciano Siani said.
Meanwhile, the most active construction steel rebar contract on the Shanghai Futures Exchange slipped for a fifth day, closing down 0.9 percent at 4,064 yuan a tonne after hitting a three-week low of 4,025 yuan a tonne.
Hot-rolled coil futures recovered from a more than 2 percent dip to close up 0.1 percent on 3,744 a tonne, snapping a four-day losing streak.
Blast furnace utilization rates at steel mills in China were down 0.69 percentage points at 67.54 percent this week, according to consultancy Mysteel. Northern China’s winter heating season, which will see tighter restrictions on industrial output, begins in the middle of this month.
“The physical industry is not good,” said Zhao Xiaobo, an analyst with Sinosteel Futures in Beijing, noting that the yuan had strengthened on Thursday, making iron ore imports cheaper for the world’s top steelmaker.
The yuan fell 0.4 percent on Friday afternoon, as the ferrous complex cut its losses.
Source: Reuters