Dalian and Singapore iron ore futures showed divergent trends on Tuesday due to a mixed near-term market outlook, with the former continuing a downtrend for the fifth consecutive session, while the latter reversed up.
The most-traded May iron ore futures contract on the Dalian Commodity Exchange (DCE) ended daytime trading 0.78% lower at 888.5 yuan($127.98)a tonne.
“The domestic market remained wary of the impact of production restrictions in (China’s major steel production hub) Tangshan. Production curbs are unlikely to lessen ahead of the two sessions,” said Yu Chen, a senior iron ore analyst at consultancy Mysteel, referring to China’s annual parliament meeting that opens on Mar. 5.
- Promotional Ads -
Meanwhile, on the Singapore Exchange, the benchmark March iron ore (SZZFH3) traded at $123.8 a tonne, up 0.87% as of 0700 GMT.
“(Iron ore)fundamentals are supportive for the moment as the daily hot metal output continues to pick up,” said Pei Hao, a Shanghai-based senior analyst from FIS, an international brokerage firm.
“Sometimes, the SGX futures prices are more reflective of fundamentals.”
Supply remained relatively tight and demand will be supported by the pick-up in downstream steel demand, analysts at Huatai Futures said in a note, warning the possible increasing pricing volatility stemming from policy uncertainties.
Brazilian miner Vale SA on Monday said its production of high-grade iron ore agglomerates is expected to increase in coming years as it sees the average premium for better quality rising in a tightening market.
The other steel-making ingredients lost the ground gained a day ago from expectations of reduced supply following enhanced safety checks at coal mines.
Coking coal declined 2.64% while coke shed 1.76%.
Steel prices continued the downward trajectory amid weakening raw material prices.
Rebar on the Shanghai Futures Exchange fell 0.64% to 4,174 yuan a tonne, hot-rolled coil EHR1! dipped 0.54%, wire rod (SWRcv1) lost 1.59%, and stainless steel moved down 0.66%