Iron ore futures wobble

The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) was steady at 819 yuan ($112.48) a metric ton, as of 0230 GMT.

The benchmark March iron ore on the Singapore Exchange was 0.56% lower at $106.25 a ton, as of 0234 GMT. China left benchmark lending rates unchanged at the monthly fixing on Thursday, signalling a cautious approach to monetary stimulus in order to avoid further pressure on the yuan.

Data earlier this week showed China’s new home prices in January were unchanged from the prior month, after stabilizing last December. While the market is still waiting for a clear sign of recovery in leading indicators including new construction starts and land sales, which would dictate a pick-up in steel consumption, signs of stability in home prices may blur the possibility of more ambitious stimulus any time soon.

Also, lingering concerns over the escalation of a global trade were ignited after US President Donald Trump said he would announce a range of tariffs over ‘next month or sooner’.

Slowing buying in the spot market after a wave of post-holiday restocking among Chinese steelmakers also weighed on prices of the key steelmaking ingredient, said analysts.

Falling ore prices amid faltering demand in China had seen major suppliers including Rio Tinto, BHP, Fortescue and Vale report sharp declines in profit in their latest earnings reports. Most steel benchmarks on the Shanghai Futures Exchange were weaker.

Rebar edged down 0.12%, hot-rolled coil nudged 0.26% lower, wire rod dipped 0.2% while stainless steel added 0.61%. Other steelmaking ingredients on the DCE gained, with coking coal and coke up 1.06% and 0.53%, respectively.