Iron ore has volatile session as traders moderate optimism on China demand – ISTOÉ DINHEIRO

Steelworks worker in China

By Enrico Dela Cruz

(Reuters) – Iron ore futures on the Singapore Exchange fell to their lowest level in nearly three weeks on Monday, while prices in Dalian fluctuated as traders reduced their optimism over the demand outlook. in China, the world’s largest steel producer.

The benchmark iron ore contract for March on the Singapore Exchange fell 1.2% to $123.40 a tonne. Earlier in the session, it hit a low since Jan. 18 at $121.15, and Friday marked its first weekly loss this year.

On China’s Dalian Commodity Exchange, the most active May contract for the steel ingredient ended day trading up 0.9% at RMB 853.50 ($125.85) a tonne, rebounding after hitting a record low. 835 yuan session.

On the spot market, ore with a content of 62% iron bound for China closed at US$126 a tonne, compared to US$127 at the close of Friday, based on data from consultancy SteelHome.

“We expect to see some immediate drop in iron ore prices this week as supply and demand side fundamentals temporarily loosen,” said Navigate Commodities Managing Director Atilla Widnell.

Steel demand in China has yet to pick up after the Lunar New Year holiday – as indicated, in part, by rising inventories – while the rate of production has improved marginally, analysts say.

The blast furnace capacity utilization rate of 247 steel mills across China surveyed by consultancy Mysteel was at 84.32% on Feb. 2, up 0.18 percentage point from Jan. 27.

(By Enrico Dela Cruz in Manila)