- Dalian iron ore rises 1%, on track for weekly gain
- SGX iron ore set for first weekly loss in three
MANILA, Jan 22 (Reuters) – Dalian iron ore futures edged higher on Friday on concerns over possible weather-related supply disruptions in key exporter Australia, while prices in Singapore dipped on worries about new COVID-19 infections in top steel producer China.
The most-traded iron ore contract on the Dalian Commodity Exchange ended the morning session 1% higher at 1,062 yuan ($164.20) a tonne.
Iron ore’s most-active February contract on the Singapore Exchange dropped 0.4% to $166.90 a tonne.
In a week that saw iron ore futures move sideways, the Dalian benchmark has so far gained 0.4%, while the Singapore front-month contract was on track for its first weekly loss of this year.
Moves this week highlighted the lack of conviction in a market worried about weakening steel margins and the COVID-19 outbreak in China, while anticipating improved steel demand after the Lunar New Year holidays next month.
“While we still feel iron ore benchmarks are in a state of disequilibrium with global supply-demand fundamentals, paper markets are likely evaluating the impact of the recent COVID-19 outbreak in Hebei province on China’s steel production and iron ore consumption,” said Atilla Widnell, managing director at Navigate Commodities in Singapore.
Spot iron ore in China stayed firm above $170 a tonne, SteelHome consultancy data showed.
“We expect that markedly lower Australian iron ore shipments over the past three weeks and the tropical cyclone fast-approaching Port Hedland will continue to underpin iron ore prices in the near term,” Widnell said.
Indicating weak demand, total inventories of finished steel products, including construction steel rebar and hot-rolled coil, held by 184 Chinese mills monitored regularly by Mysteel consultancy grew 3.3% over Jan. 14-20 to 5.95 million tonnes.
Rebar on the Shanghai Futures Exchange rose 0.7%, while hot-rolled coil gained 0.1%. Stainless steel slumped 1.8%.
Dalian coking coal slipped 0.3% but coke jumped 1.3%.
(Reporting by Enrico Dela Cruz; Editing by Subhranshu Sahu)