BEIJING:Following the most recent warning from China regarding speculative activity in the market and ongoing production restrictions, Dalian iron ore futures extended their losses on wednesday due to persistent concerns regarding additional government intervention in the market.
As the most-traded May iron ore futures contract on the Dalian Commodity Exchange (DCE) was down 0.95% to 890.5 yuan (or $194.41 per tonne), down from 2.48 percent the day before.
Also Read : Copper Futures Falls As Dollar Recovers
In a note, analysts at Huatai Futures stated that “the main factors that weighed on (iron ore) prices are the environmental protection-induced production curbs among steel mills (in northern China) and uncertainties stemming from policy control in response to high prices.”
Following a forecast of heavy air pollution in the coming days, the major steel-making hubs of northern China’s Handan and Tangshan cities implemented level-2 emergency responses on March 17 and March 20, respectively.
Coking coal and coke, two other ingredients used in the production of steel, both suffered additional losses, falling 0.74 percent and 0.54 percent, respectively. However, the benchmark April iron ore saw a 0.4% increase to $126 per tonne on the Singapore Exchange.
Yu Chen, a senior iron ore analyst at consultancy Mysteel based in Shanghai, stated, “The fluctuation (in iron ore prices) indicates that the market is seeking a clear direction amid mixed factors at the moment.” Steel prices showed some resilience despite continuing their downward trend.