Iron ore price slides to 4-month low on higher China inventories, slow construction

The most-traded May iron ore on China’s Dalian Commodity Exchange ended daytime trade 3.21% lower at 875 yuan ($121.57) per metric ton, the lowest since Oct. 27, 2023, following a drop of over 6% in the past week.
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The benchmark March iron ore on the Singapore Exchange was 3.41% lower at $115.95 a ton, as of 0706 GMT, also the lowest since Oct. 27.

“Inventories of iron ore at major Chinese ports rose. Supply concerns also eased, with a cyclone threatening WA (Western Australia) ports now tracking away from the state’s iron ore hub,” analysts at ANZ bank said in a note.

Inventories at major Chinese ports surveyed climbed by 2.1% on-week to 133.1 million tons in the week to Feb. 23, hitting the highest since April 2023, data from consultancy Steelhome showed.

Also, Vale, the world’s second-largest supplier of iron ore, said the latest train incident caused by heavy rains in Brazil would not impact its shipments or production.

Global iron ore shipments hovered at almost the highest level in three years and if the high shipments continue in a seasonally slow season, ore prices can hardly find any support from the supply side, analysts at Sinosteel Futures said in a note.

Dragging down prices of the key steelmaking ingredient was also the bearish near-term outlook for steel fundamentals, Mysteel said.

Construction sites in various places in China have been slow to resume production due to heavy rains and snow, Shanghai Metals Market said.

China’s new home prices extended declines in January, data showed on Friday, despite Beijing’s support to restore confidence in the debt-ridden property sector.

Other steelmaking ingredients on the DCE slid as supply concerns that had contributed to last Friday’s price rally eased. Coking coal and coke were down 4.33% and 2.92%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were mostly down.

Rebar slid 1.29%, hot-rolled coil dropped 1%, wire rod decreased 0.98%, and stainless steel lost 0.32%.