MANILA, June 15 (Reuters) - Dalian iron ore futures held steady on Monday as China’s falling portside stockpiles of the steelmaking raw material supported prices, despite fears of a potential second wave of coronavirus infections locally and signs of weakening domestic steel demand.
The Dalian Commodity Exchange’s most-traded September iron ore ended flat at 762.50 yuan ($107.51) a tonne, erasing early gains. Iron ore on the Singapore Exchange, however, fell 2.1% to $100.03 in afternoon trade.
Imported iron ore stocked at China’s ports dropped to 107.75 million tonnes last week, the lowest since October 2016, SteelHome consultancy data showed. SH-TOT-IRONINV
The further decline in portside inventory showed Chinese steel mills’ strong demand for iron ore as they ramped up production, with crude steel output rising 8.5% in May from a month earlier and up 1.9% in January-May from a year earlier.
But latest weekly data showed that destocking of steel products has slowed, Sinosteel Futures Co Ltd analysts wrote in a note.
“In the short term, the output may remain high, and small growth may still occur, but the probability of a substantial increase in production is weak when demand is weak,” they said.
