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Iron ore futures prices slipped on Wednesday amid rising inventories at Chinese ports, despite hopes for greater intervention in the country’s flagging property market.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) DCIOcv1 ended day time trading 2.91% lower at 866 yuan($119.85) a metric ton.
Prices erased gains from a 2.63% rally on Monday, the first day of trading following China’s May Day public holiday, which came after a Politburo read out said that authorities should conduct research on policies and measures to reduce housing inventory in order to prevent and diffuse risk in the real estate market.
“Due to the end of the Chinese holiday, iron ore inventory replenishment speculation has ended. In addition, arrivals at the port during the working days of May continue to be high, and the port inventory is at a seasonal high,” said Pei Hao, a Shanghai-based analyst at international brokerage Freight Investor Services (FIS).
“The fundamental factors are bearish this week,” he added.
Iron ore imports this year in China, the world’s largest consumer, are expected to be broadly the same as last year at around 1.17 billion to 1.18 billion metric tons, a senior official of miner Vale said on Wednesday.
Other steelmaking ingredients on the DCE fell, with coking coal DJMcv1 and coke DCJcv1 down 4.72% and 3.91%, respectively.
Steel benchmarks on the Shanghai Futures Exchange also eased slightly. Rebar SRBcv1 was down 1.47%, hot-rolled coil SHHCcv1 eased 1.63%, wire rod SWRcv1 declined 1.72% and stainless steel SHSScv1 slipped 1.84%.