Iron ore futures slipped on Monday, as fresh COVID flare-ups in the world’s top steelmaker China dented demand outlook, while expectations of rising supplies after India’s decision to scrap export taxes on low-grade iron ore also weighed on sentiment.
The most-traded January iron ore on China’s Dalian Commodity Exchange shed 1.4% to 735 yuan ($102.67) a tonne as of 0450 GMT.
On the Singapore Exchange, the benchmark December iron ore was down 3.6% at $95.1 a tonne.
Contracts on both the bourses had posted weekly gains for three weeks in a row since late-October, as China’s latest moves to shore up its flagging economy had brightened demand prospects.
However, concerns over near-term economic activity resurfaced with China fighting numerous COVID-19 flare ups. For Sunday, it reported 26,824 new local cases, nearing April’s peaks. It also recorded two deaths in Beijing.
“Ferrous futures are all dragged down by the worsening COVID situation, and the prices are likely under downward pressure as it seems to last,” a Chinese iron ore trader said.
Chinese steel benchmarks and other steelmaking inputs also reversed gains on Monday.
The most-active rebar contract on the Shanghai Futures Exchange lost 1.7%, hot-rolled coil SHHCcv1 moved down 1.4%, wire rod dipped 0.5%, while stainless steel nudged 0.8% up.
India scrapped export taxes on low-grade iron ore and on some intermediate steel products beginning Saturday, after months of complaints from miners and steel makers about loss of foreign sales opportunities.
China imported 9.77 million tonnes of iron ore from India till October, down 70.2% the same period a year ago.
With the resumed supplies from India, more availability of iron ore globally might pressure prics downwards, Ma Liang, iron ore analyst at Guotai Junan Futures, said in a note.
Dalian coking coal DJMcv1 and coke fell 2.2% and 2.7%, respectively.
