Iron ore extends decline on rise in supplies, off-season demand woes
SINGAPORE: Iron ore futures prices fell for a second straight session on Wednesday, as increased shipments from Australia and Brazil, and slowing seasonal demand from top consumer China weighed on sentiment.
The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) ended morning trade 0.85% lower at 699.5 yuan ($97.58) a metric ton.
The benchmark July iron ore on the Singapore Exchange was 0.46% lower at $92.55 a ton, as of 0349 GMT.
The total volume of iron ore shipments from top suppliers Australia and Brazil increased to 30.1 million tons from June 16-22, reaching a year high, said Chinese consultancy Mysteel.
Australia's Rio Tinto , the world's largest iron ore producer, has received all necessary government approvals for its Hope Downs 2 project.
The Hope Downs 2 project, a joint venture between Rio Tinto and Hancock Prospecting, will have an annual production capacity of 31 million tons.
'Rio Tinto expects to invest more than $13 billion on new mines, plant and equipment,' the company said in a statement on Tuesday. 'Iron ore prices extended recent losses on signs of steady supply,' according to ANZ analysts.
Still, as construction activity slows over the summer, Chinese imports of iron ore are likely to fall further, added ANZ. On the demand front, global steel output fell 3.8% in May compared to a year earlier, according to data from the World Steel Association.
Dalian iron ore hits one-week
According to the Chinese central bank, China will 'guide financial institutions from both the supply and demand side of consumption,' as part of broader efforts to boost domestic consumption.
Other steelmaking ingredients on the DCE dipped, with coking coal and coke down 0.69% and 0.48%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange fell.
Rebar and wire rod inched lower around 0.5%, hot-rolled coil eased 0.35%, while stainless steel rose 0.77%.
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