Industry News

Iron ore hits near 2-month low on weak China pre-holiday demand

Views : 210
Update time : 2021-02-02 16:41:34

Iron ore futures fell to their lowest in nearly two months on Tuesday, as market participants turned cautious ahead of the week-long Lunar New Year holiday beginning on Feb. 11 in top steel producer China.

The most-traded May iron ore contract on China's Dalian Commodity Exchange slumped as much as 3.4% to 955.50 yuan ($147.89) a tonne, its weakest since Dec. 10.

The steelmaking ingredient's March contract on the Singapore Exchange tumbled as much as 6% to $142 a tonne, also its lowest since Dec. 10, though it quickly recovered to $148.40 by 0338 GMT.

"As things stand, we estimate $150 iron ore as the approximate average breakeven for Chinese steel production, which is where prices are right now," said Howie Lee, an economist at OCBC Bank in Singapore.

"With the various travel restrictions in Hebei and the impending Spring Festival, the market is naturally seeing some weakness in demand," he added, referring to China's top steelmaking province, where new clusters of COVID-19 cases have been detected.

Aside from the market's weak pre-holiday risk appetite, prices of steel products and inputs have come under pressure due to falling steel profit margins in China.

Iron ore prices are likely to stick close to $150 before a clearer picture on Chinese demand emerges after the holiday, Lee said.

Spot iron ore in China traded at $158 a tonne on Monday, the weakest since Dec. 15, based on SteelHome consultancy data.

Related News
Read More >>
Ukraine's steel production increases by 15.8% in 2024 Ukraine's steel production increases by 15.8% in 2024
Jan .17.2025
Ukraine's steel production increases by 15.8% in 2024
EU steel & aluminum industries urge stricter scrap export controls amid rising leakage EU steel & aluminum industries urge stricter scrap export controls amid rising leakage
Jan .17.2025
EU steel & aluminum industries urge stricter scrap export controls amid rising leakage
South Korea recommends provisional AD measure on Chinese stainless steel plates South Korea recommends provisional AD measure on Chinese stainless steel plates
Jan .17.2025
South Korea recommends provisional AD measure on Chinese stainless steel plates
LME records highest trading activity since 2015 as nickel & tin lead growth LME records highest trading activity since 2015 as nickel & tin lead growth
Jan .17.2025
LME records highest trading activity since 2015 as nickel & tin lead growth