The most-traded May iron ore futures contract on the Dalian Commodity Exchange (DCE) traded 1.17% lower at 885 yuan ($127.67) a tonne as of 0200 GMT.
“The domestic market remained wary of the impact of production restrictions in (China’s major steel production hub) Tangshan. Production curbs are unlikely to lessen ahead of the two sessions,” said Yu Chen, a senior iron ore analyst at consultancy Mysteel, referring to China’s annual parliament meeting that opens on Mar. 5. Meanwhile, on the Singapore Exchange, the benchmark March iron ore traded at $123.75 a tonne, up 0.83%.
“(Iron ore) fundamentals are supportive for the moment as the daily hot metal output continues to pick up,” said Pei Hao, a Shanghai-based senior analyst from FIS, an international brokerage firm. “Sometimes, the SGX futures prices are more reflective of fundamentals.”
Supply remained relatively tight and demand will be supported by the pick-up in downstream steel demand, analysts at Huatai Futures said in a note, warning the possible increasing pricing volatility stemming from policy uncertainties.
