Dalian
and Singapore iron ore futures showed divergent trends on Tuesday due to a
mixed near-term market outlook, with the former continuing a downtrend for the
fifth consecutive session, while the latter reversed up.
The
most-traded May iron ore futures contract on the Dalian Commodity Exchange
(DCE) ended daytime trading 0.78% lower at 888.5 yuan($127.98)a tonne.
“The
domestic market remained wary of the impact of production restrictions in
(China’s major steel production hub) Tangshan. Production curbs are unlikely to
lessen ahead of the two sessions,” said Yu Chen, a senior iron ore analyst at
consultancy Mysteel, referring to China’s annual parliament meeting that opens
on Mar. 5.
Meanwhile,
on the Singapore Exchange, the benchmark March iron ore traded at $123.8 a
tonne, up 0.87% as of 0700 GMT.
“(Iron
ore)fundamentals are supportive for the moment as the daily hot metal output
continues to pick up,” said Pei Hao, a Shanghai-based senior analyst from FIS,
an international brokerage firm.
“Sometimes,
the SGX futures prices are more reflective of fundamentals.”
Supply
remained relatively tight and demand will be supported by the pick-up in
downstream steel demand, analysts at Huatai Futures said in a note, warning the
possible increasing pricing volatility stemming from policy uncertainties.
Brazilian
miner Vale SA on Monday said its production of high-grade iron ore agglomerates
is expected to increase in coming years as it sees the average premium for
better quality rising in a tightening market.
The
other steel-making ingredients lost the ground gained a day ago from
expectations of reduced supply following enhanced safety checks at coal mines.
Coking
coal declined 2.64% while coke shed 1.76%.
Steel
prices continued the downward trajectory amid weakening raw material prices.