Iron ore futures fell on Friday as near-term demand prospects darkened in top steel producer China, which is battling its worst Covid-19 outbreak since March, but concerns over possible supply disruptions in key exporter Australia lent some support.
Iron ore on China’s Dalian Commodity Exchange ended daytime trading 0.5% lower at 1,046.50 yuan ($161.71) a tonne, surrendering early gains.
The steelmaking raw material lost 1% to $165.91 a tonne on the Singapore Exchange by 0707 GMT.
In a week that saw iron ore futures move sideways, the Dalian benchmark dropped 0.3%, 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 Covid-19 restrictions 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.
