SINGAPORE, Nov 8:
Chinese iron ore futures dropped on Friday for a fourth successive day after monthly imports by the world’s biggest consumer of the commodity fell from a record high in September as slower steel demand cut into production.
China’s imports of iron ore fell to 67.83 million tonnes in October from 74.58 million the previous month, customs data showed.
‘If you look at China’s daily steel production in October, it dropped compared to September because underlying steel demand is not that strong, so that tempered iron ore imports,’ said Helen Lau, senior mining analyst at UOB Kay Hian Securities in Hong Kong.
‘Imports will continue to fall as China curbs steel production due to slow demand and the anti-pollution campaign. Imports may be at 64 million to 65 million tonnes in November.’
The most-active iron ore contract for delivery in May at the Dalian Commodity Exchange was down 0.4 percent at 940 yuan ($154) a tonne by the midday break, on track for a modest weekly decline.
At the Shanghai Futures Exchange, the most-traded rebar for shipment in May was unchanged at 3,668 yuan a tonne, and also steady for the week.
China’s daily crude steel output slipped to 2.098 million tonnes on average in the last 11 days of October from 2.107 million in the previous 10 days, industry data show.
The pace has fallen steadily from 2.152 million tonnes in late September, amid modest gains in steel prices.
The week-long National Day holiday last month may also have led to the drop in imports, although traders say the October arrivals were probably booked earlier.
Spot iron ore prices stayed above $130 a tonne in October, but only managed to peak at $134, with Chinese mills in no rush to replenish stockpiles. But prices began recovering this month as some mills returned to the market.
Iron ore for immediate delivery at China’s Tianjin port touched a two-month high of $137.10 a tonne on Wednesday, data provider Steel Index said. It slipped to $136.90 on Thursday.
‘Steel mills are looking to restock but are taking a wait-and-see approach, with current prices being viewed as fractionally high,’ investment bank ANZ said in a note.
Investors are eyeing China’s Communist Party meeting, which ANZ said ‘could create some upside to bulk commodity prices on the back of fresh infrastructure policies’. The meeting will run from Saturday to Tuesday.
(AGENCIES)
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