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Dalian iron ore declines on softening near-term demand

Dalian iron ore futures extended declines on Friday as softening near-term demand and bleak factory data in top consumer China weighed on sentiment.

The most-traded September iron ore on China’s Dalian Commodity Exchange (DCE) DCIOcv1 was1.42% lower at 867.5 yuan ($119.80) per metric ton in the morning session. It logged an intraday low of 861 yuan earlier in the day.

The benchmark July iron ore SZZFN4 on the Singapore Exchange was, however, 0.15% higher at $115.8 a ton as of 0335 GMT.

The average daily hot metal output among steelmakers surveyed dropped by 0.4% week-on-week to about 2.36 million tons as of May 31, data from consultancy Mysteel showed.

Some steel mills had opted for a wait-and-see approach, with suppressed purchasing enthusiasm for iron ore, information provider Shanghai Metals Market said in a report on Thursday.

China’s manufacturing activity unexpectedly fell in May, an official factory survey showed on Friday, keeping alive calls for fresh stimulus as a protracted property crisis continued to weigh on businesses, consumers and investors.

Other steelmaking ingredients on the DCE fell, with coking coal DJMcv1 down 1.66% at 1,686.5 yuan ($232.91) a ton, and coke DCJcv1 plummeting 3.29% to 2,289.5 yuan ($316.18).

Steel benchmarks on the Shanghai Futures Exchange (SHFE) were mostly down.

SHFE rebar SRBcv1 slid 1.64% to 3,711 yuan ($512.49) a ton, hot-rolled coil SHHCcv1 dropped 1.62% to 3,835 yuan ($529.62), wire rod SWRcv1 decreased 1.7% to 3,939 yuan ($543.98) and stainless steel SHSScv1 lost 1.32% to 14,560 yuan ($2,010.74).
Source: Reuters (Reporting by Cassandra Yap and Amy Lv; Editing by Sohini Goswami)

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