Dalian iron ore dips as mixed supply data, softer global steel outlook weigh

Dalian iron ore futures prices declined on Thursday, as investors weighed mixed production data while a softer global steel market outlook added pressure on prices.

The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 0.26% lower at 755.0 yuan ($106.13) a metric ton.

The benchmark November iron ore SZZFX4 on the Singapore Exchange, however, was 1% higher at $99.70 a ton, as of 0710 GMT.

Production reports from major miners have shown they have overcome supply disruptions to raise output in recent months, while steel production is falling, ANZ analysts said in a note.

Australia’s Fortescue FMG.AX, the world’s fourth-largest iron ore miner, on Thursday posted a 4% rise in its first-quarter iron ore shipments but noted a drop in realised prices.

However, South Africa’s Kumba Iron Ore KIOJ.J said its total production in the third quarter decreased by 3%, leaving its sales guidance unchanged.

Thursday’s readings follow higher-than-expected output estimates from other top miners, including BHP BHP.AX, and come at a time when rivals such as Vale VALE3.SA and Rio Tinto RIO.AX are moving to expand supplies.

China’s crude steel output fell to 77.1 million tons in September, declining 6.1% month-on-month and dropping 3.1% from a year ago, World Steel Association data showed on Wednesday.

Japan, one of the world’s top five largest steel producers, saw its September crude steel output fall 3.6% from August and 5.8% year-on-year, data from the Japan Iron & Steel Federation showed.

Unless Japan’s output picks up in the coming months, the total for the current fiscal year ending next March could fall to a four-year low, said consultancy Mysteel.

Other steelmaking ingredients on the DCE were weaker, with coking coal DJMcv1 and coke DCJcv1 easing 0.37% and 0.61%, respectively.

Most steel benchmarks on the Shanghai Futures Exchange ticked lower. Rebar SRBcv1 dipped 0.12%, hot-rolled coil SHHCcv1 edged down 0.2%, wire rod SWRcv1 shed 0.53%, although stainless steel SHSScv1 gained nearly 0.6%.
Source: Reuters (Reporting by Gabrielle Ng; Editing by Sumana Nandy and Mrigank Dhaniwala)