Dalian iron ore edges down after 6-day romp ahead of Chinese New Year holiday
Chinese iron ore futures slipped on Monday after a six-day spike with most steel producers done with building up stockpiles ahead of the week-long Lunar New Year break that begins on Thursday.
But steel prices were marginally higher, supported by news that China’s top steelmaking city of Tangshan will extend restrictions on production beyond the end of the winter heating season on March 15.
The most-active iron ore contract for May delivery on the Dalian Commodity Exchange was down 0.7 percent at 524.50 yuan ($83) a tonne by 0215 GMT. The decline in the price of the steelmaking raw material followed a series of gains that saw it touch a two-week high of 535.50 yuan on Friday.
“Most of the mills have already finished their purchases and most traders are on holiday now,” said an iron ore trader in China’s port city of Rizhao.
And with market liquidity likely to be limited, “the likelihood of iron ore futures falling sharply this week is high,” ANZ analysts said in a note.
Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB slid 1.1 percent to $76.46 a tonne on Friday, according to Metal Bulletin. But the spot benchmark ended the past week 2.8 percent higher, tracking firmer iron ore futures in China.
Rebar on the Shanghai Futures Exchange rose 0.1 percent to 3,915 yuan a tonne on Monday.
A document posted on the Tangshan city government’s website on Friday said the city would draw up a plan to extend some output curbs, including on eight central steel mills, by the end of this month.
Steel plants in Tangshan, a heavily polluted city in the northern Hebei province, were forced to cut production by as much as half from mid-November as part of China’s campaign to fight pollution during winter.
Reuters reported on Feb. 1 that Tangshan was considering prolonging the curbs beyond mid-March, but the Hebei government denied there was such a plan for the province.
Coking coal gained 0.3 percent to 1,366 yuan a tonne and coke was off 0.1 percent at 2,123.50 yuan.
Source: Reuters (Reporting by Manolo Serapio Jr. Editing by Kenneth Maxwell)