Iron ore futures were mixed on Thursday, with China’s Dalian contract falling for a third consecutive day, hurt by aslow start to China’s construction season and higher supply from Brazil.
The most-traded May iron ore on the Dalian Commodity Exchange DCIOcv1 closed 1.9% lower at 797 yuan ($110.27) per metric ton.
However, the benchmark April iron ore SZZFJ4 on the Singapore Exchange was 0.4% higher at $101.70 a metric ton as of 0813 GMT.
Citi analysts said iron ore prices have come under pressure this year given a confluence of factors, including a slow start to China construction season, high Brazil iron ore exports and high exports into China from non-traditional suppliers amid elevated ore prices during late 2023.
“That said, we expect China steel production to lift from current levels as we head into construction season,” they said in a note.
“China steel consumption growth will likely remain weak but with industry profits up, we expect steel producers to lift output with steel exports remaining high.”
The analysts forecast iron ore prices to rebound in the second quarter to an average of$120 a ton.
Other steelmaking ingredients on the DCE fell, with coking coal DJMcv1 dropping 2.7% to 1,570.50 yuan a ton and coke DCJcv1 down 1.7% at 2,047.50 yuan.
Steel benchmarks on the Shanghai Futures Exchange were mostly down.
Rebar SRBcv1 slid 0.6% to 3,481 yuan a ton, hot-rolled coil SHHCcv1 dropped 1.4% to 3,692 yuan, wire rod SWRcv1 decreased 1.2% to 3,750 yuan, while stainless steel SHSScv1 bucked the trend and gained 0.9% to 13,490 yuan.
Source: Reuters (Reporting by Mai Nguyen in Hanoi; Editing by Sohini Goswami and Varun H K)
