Tiny but vital metal markets rush to adjust to Chinese clampdown
A bigger clampdown looks set to have far-reaching ramifications for supply chains feeding American defense and chip-making industries.
Iron ore prices retreated on Thursday on disappointing steel demand data coming from China.
The output of construction steel products, including rebar and wire rod, declined by 1.04% week-on-week to 4.23 million tonnes during the week as of April 6, while the apparent demand for both fell by 6.7% week-on-week to 4.36 million tonnes over the same period, data from consultancy Mysteel showed.
Benchmark 62% Fe fines imported into Northern China fell 0.45% on Thursday, to $119.24 per tonne, the lowest since January.
The most-traded September iron ore futures contract on the Dalian Commodity Exchange (DCE) ended daytime trading 1% lower at a two-week low of 793 yuan ($115.35) a tonne.
China’s National Development and Reform Commission (NDRC) said on Tuesday that it would step up supervision of iron ore markets and urged futures companies not to exaggerate price increases deliberately.
The Chinese market was closed on Wednesday for a public holiday.
“What matters most is the actual (steel) demand performance for the moment. If demand could not pick up in line with expectations, (iron ore) prices may feel further pressure,” said a Shanghai-based iron ore analyst.
“The (steel) demand has recently been relatively weak while production hovered at a high level, putting prices under downward pressure,” analysts at Everbright Futures said in a note.
Read More: Iron ore price expected to ease over next 5 years on slower demand growth and more supply
($1 = 6.8749 Chinese yuan)
(With files from Reuters)
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