MANILA: In another range-bound session on Thursday, Dalian and Singapore iron ore futures were slightly firmer as traders continued to evaluate demand prospects in light of the dim outlook for property developers in China’s top steel producer.
As of 0307 GMT, the price of a tonne of the most traded May iron ore on China’s Dalian Commodity Exchange was 871 yuan, or $172.26. The benchmark March contract for the steelmaking ingredient was up 0.3 percent at $123.60 per tonne on the Singapore Exchange.
As a result of Beijing’s decision to abandon its strict zero-COVID strategy and increase policy support for struggling property developers, iron ore prices have increased from around $80 per tonne in November.
However, indicators indicated that the property market still required more stimulative policies to ensure a long-term recovery, and analysts noted that the anticipated rebound in Chinese demand for steel has been slow thus far.
As a result, the profitability of mills has been harmed by decreased domestic demand for steel and increased costs of steelmaking ingredients. Overall, iron ore prices have fallen as a result of low profits and a weak recovery in end demand, according to a note from analysts at Sinosteel Futures. They also stated that the market was “still in the demand verification period.”
SteelHome consultancy data revealed that iron ore portside inventory in China reached a five-month high last week, adding to the cautiousness. However, some data are supporting ferrous commodities.
According to official data released on Thursday, demand was boosted by the end of the zero-COVID regime, favorable property policies, and market expectations for additional stimulus measures. As a result, China’s new home prices increased in January for the first time in a year.
Coke and coking coal both gained 2% on the Dalian exchange. Rebar gained 1.2 percent, hot-rolled coil gained 0.9 percent, and wire rod gained 0.6 percent among the Shanghai Futures Exchange’s steel benchmarks. Stainless steel gained 0.1 percent.
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