By Amy Lv and Lewis Jackson
BEIJING (Reuters) – Iron ore futures surrendered early gains to trade lower on Wednesday, as sentiment was spooked by resumed market talks of China’s plan of trimming crude steel output to rein in oversupply plaguing the industry.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 0.32% lower at 769.5 yuan ($106) a metric ton after touching an intraday high of 785 yuan a ton earlier in the session.
The benchmark April iron ore on the Singapore Exchange slipped 0.8% to $99.95 a ton, as of 0744 GMT after touching the highest since March 3 at $102.05 a ton earlier.
The weakness came after market speculation that details for China’s steel output control have been finalized and will be made public later this week.
China’s National Development and Reform Commission, its state planner, did not respond to Reuters’ request for comment.
The state planner unveiled its plan on March 5 to curtail crude steel output this year, without specifying details on the volumes to be cut and from when.
Some market participants had speculated that steel output could be cut by 50 million tons this year.
A reduction in steel output will lower consumption of steelmaking feedstocks.
Ore prices rose in morning trading as investors bet on a pick-up in near-term demand for the key steelmaking ingredient after the conclusion of China’s annual parliament meeting.
Some steel mills, which had started maintenance on their blast furnaces, gradually resumed operations driven by decent margins and signs of improving demand, analysts at consultancy Mysteel said in a note.
Steel benchmarks on the Shanghai Futures Exchange gained ground. Rebar added 0.59%, hot-rolled coil rose 0.63%, wire rod climbed 0.29% and stainless steel ticked 0.71% higher.
Other steelmaking ingredients on the DCE advanced, with coking coal and coke up 0.8% and 0.06%, respectively.
($1 = 7.2461 Chinese yuan)
(Reporting by Amy Lv and Lewis Jackson; Editing by Mrigank Dhaniwala)
Comments