Chinese iron ore price dips but rises on a weekly basis

Financial street in Beijing (Stock Image)

Iron ore futures in China eased on Wednesday, but were trading higher on a weekly basis, as market participants balanced weak demand and hopes for better future consumption.

The most-traded May iron ore on China’s Dalian Commodity Exchange (DCE) closed 2.5% lower at 749 yuan ($103.52) per metric ton. However, the contract was up 2.5% on a weekly basis.

Chinese markets will be closed on Thursday and Friday for a public holiday.

China’s property crisis has dragged down demand for steel products, which are heavily used in building construction.

The country could issue a larger amount of bonds in the second quarter compared with the first three months of this year, potentially helping with demand, Jinrui Futures said in a note.

“The recent decline in raw material prices has been greater than that of finished products, so profits per ton of steel have recovered. There is a possibility of steel mills resuming production, and expectations for raw material replenishment have increased,” it said.

In this holiday-truncated week, buying was compressed into the first three days, boosting demand for ferrous metals and raw materials, a trader said.

The benchmark May iron ore on the Singapore Exchange dropped 1.9% to $99.65 a metric ton as of 0710 GMT.

Other steel-making ingredients on the DCE were mixed, with coking coal advancing 0.8% to 1,471.50 yuan a ton, and coke down 0.6% to 1,960.50 yuan.

Steel benchmarks on the Shanghai Futures Exchange were down.

Rebar fell 1.2% to 3,422 yuan a ton, hot-rolled coil was down 0.8% at 3,659 yuan, wire rod decreased 0.5% to 3,728 yuan, while stainless steel gained 0.2% to 13,465 yuan.

($1 = 7.2354 yuan)

(By Mai Nguyen; Editing by Mrigank Dhaniwala and Shounak Dasgupta)

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