Dalian and Singapore iron ore futures declined on Monday after China’s state planner issued another warning against speculation in the market and fresh production curbs were imposed in major Chinese steel cities.
China’s National Development and Reform Commission said on Friday it would look yet again at measures to curb “unreasonable” iron ore prices and urged trading firms to avoid hoarding and inflating prices.
Tangshan, China’s top steel production hub, said on Monday it would launch a level 2 emergency response after heavy air pollution was forecast for this week. Handan, another major steel city, implemented similar curbs on March 17.
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“Some steel mills (in Tangshan) will reduce their sintering capacity between 30% and 50%,” said Wu Yuling, a Shanghai-based iron ore analyst at consultancy Mysteel.
Steel mills currently have enough sinter ore inventory to sustain normal production for around eight days, she added.
The most-traded May iron ore futures contract on China’s Dalian Commodity Exchange (DCE) ended daytime trading 2.48% lower at 883 yuan ($128.14) a tonne, the lowest since March 3.
On the Singapore Exchange, the benchmark April iron ore was at $125.95 a tonne, as of 0800 GMT, down 3.7%. It was down 4.7% from a recent high of $132.18 a tonne hit on March 15.
Other steelmaking ingredients also recorded losses. Coking coal dipped 0.56% and coke shed 1.38%.
Steel prices also weakened but not as much as iron ore, with market participants weighing optimism about near-term demand against falling raw material prices.
Rebar on the Shanghai Futures Exchange slid 0.94% to 4,194 yuan a tonne, hot-rolled coil SHHCcv1 dropped 0.55% and wire rod fell 0.87%. Stainless steel was little changed.
“Prices (of stainless steel) corrected upward following a steep fall in the previous week, but overall fundamentals remain unfavourable,” said Ellie Wang, a Shanghai-based senior nickel analyst at consultancy CRU group.
Source: Reuters (Reporting by Amy Lv and Dominique Patton in Beijing; Editing by Subhranshu Sahu)