Benchmark iron ore futures in Asia fell on Wednesday (8), with market sentiment affected by reduced profitability at Chinese steelmakers after a recent rise in steel ingredient prices.
Top-traded iron ore for September delivery on China’s Dalian Commodity Exchange ended day trading down 0.5% at 926.50 yuan ($138.85) a tonne.
On the Singapore Stock Exchange, July’s most active iron ore contract dropped 0.2% to $144.30 a tonne.
A price rally that began in late May sent iron ore on the Dalian Exchange to a 10-month high last Monday, while the SGX contract hit its highest level in nearly five weeks on Tuesday, supported by renewed optimism around demand in China, the world’s largest steel producer.
Concerns about dwindling inventories of imported iron ore at Chinese ports added fuel to this rally.
But iron ore and other more expensive steel inputs mean reduced profits for steelmakers, which have yet to see a significant recovery in steel demand, even as China eases Covid-19 restrictions.
The iron ore spot price for the 62% grade reference material in China hit $147.50 a tonne on Wednesday, according to consultancy SteelHome.
Source: CNN Brasil
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