Iron ore dips as focus shifts to softening China steel demand
The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) closed daytime trade 0.14% lower at 701 yuan ($97.60) a metric ton.
The benchmark July iron ore on the Singapore Exchange lost 0.8% to $94.7 a ton, as of 0701 GMT. Given the lack of core driving forces, prices of the key steelmaking ingredient are expected to fluctuate amid seasonally weak demand, analysts at Galaxy Futures said in a note.
'There is no big change to fundamentals in the iron ore market. The wave of upward momentum led by the price rally of coal faded, so ore prices also softened,' said Zhuo Guiqiu, an analyst at broker Jinrui Futures.
However, downside potential is capped by a relatively high hot metal output, despite production cuts and declining portside inventories, Zhuo added.
Hot metal output is typically used to gauge iron ore demand.
Despite a trade truce between China and the United States, steel exports have recently shown signs of slumping, dragging demand, Galaxy's analysts added. Weak steel consumption is also a downside risk for feedstocks.
Iron ore rebounds on short-covering
Other steelmaking ingredients, coking coal and coke , recorded further gains albeit at a slower pace, rising 1.68% and 0.56%, respectively, following Wednesday's more than 6% rally.
Steel benchmarks on the Shanghai Futures Exchange were range-bound.
Rebar nudged up 0.14%, hot-rolled coil lost 0.19%, wire rod added 0.06% and stainless steel advanced 0.2%.
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