Iron ore seesaws as traders weigh demand prospects in China
SGX iron ore hits three-week low below $120/T
Dalian iron ore edges higher in choppy trade
By Enrico Dela Cruz
Feb 8 (Reuters) -Iron ore futures swung back and forth on Wednesday, with the Singapore benchmark briefly trading below $120 a tonne, as traders reassessed near-term demand prospects in top steel producer China.
Benchmark March iron ore on the Singapore Exchange SZZFH3 was up 0.1% at $121.10 a tonne, as of 0715 GMT, after falling 2.5% to $118 a tonne earlier in the session, its weakest since Jan. 17.
On China's Dalian Commodity Exchange, the steelmaking ingredient's most-active May contract DCIOcv1 ended daytime trade 0.7% higher at 848 yuan ($124.99)a tonne. It earlier dropped 1.1% to 833 yuan.
China's stepped-up policy support for its ailing property sector and dismantling of strict COVID-19 restrictions had pushed iron ore and steel prices to multi-month highs in January.
"Prospects of strong iron ore demand due to China's reopening and various supportive measures for the property market are well reflected in the recent price rally in iron ore," ANZ commodity strategists said in a note.
"Nevertheless, property market indicators are still subdued. While recent developments are boding well for demand, we expect iron ore prices to consolidate before seasonal demand kicks in."
Iron ore was supported after the world's largest miner BHP Group BHP.AX said it had suspended its Western Australian iron ore operations for a day after a worker was struck by a train at its Port Hedland facility.
But increasing portside iron ore inventory in China, which as of last week was the biggest since December based on SteelHome consultancy data, also kept trading subdued. SH-TOT-IRONINV
The real recovery in Chinese iron ore demand could be seen in the second quarter, analysts said.
Other Dalian steelmaking inputs were firmer, with coking coal DJMcv1 up 1.2%, while coke DCJcv1 gained 2%.
Steel benchmarks also gained, with rebar on the Shanghai Futures Exchange SRBcv1 up 1%, hot-rolled coil SHHCcv1 gaining 1.2%, and wire rod SWRcv1 climbing 0.4%. Stainless steel SHSScv1 slipped 0.4%.
Reporting by Enrico Dela Cruz in Manila; Editing by Subhranshu Sahu and Sherry Jacob-Phillips
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.