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Prices of iron ore and steel products in China declined on Thursday, pressured by weaker steel demand as stockpiling needs eased after China’s Labour Day holiday.
The most-traded September iron ore on China’s Dalian Commodity Exchange (DCE) DCIOcv1 closed 1.7% lower at 865.50 yuan ($119.79) per metric ton.
The benchmark June iron ore SZZFM4 on the Singapore Exchange, however, edged up 0.1% at $114.85 a ton, as of 0704 GMT.
Other steel-making ingredients on the DCE fell, with coking coal DJMcv1 down 2.4% at 1,769.50 yuan a ton and coke DCJcv1 shedding 2.1% to 2,297 yuan a ton.
“Demand has been weak post the Labour day long holidays and we’ve had three consecutive days of physical volumes trading lower,” a trader said.
Steel mills have pushed back against higher price offers from coking coal plants in the physical market, the trader said.
Steel benchmarks on the Shanghai Futures Exchange (SHFE) were mostly down but remained above their technical support levels, the trader said, adding that whether they can stay above those levels depends on how the physical demand performs.
SHFE rebar SRBcv1 slid 0.9% to 3,669 yuan a ton, hot-rolled coil SHHCcv1 eased 0.7% to 3,807 yuan, wire rod SWRcv1 decreased 0.7% to 3,884 yuan, while stainless steel SHSScv1 rose 0.2% to 14,185 yuan.
Embattled Chinese developer Country Garden 2007.HK said it is unable to pay onshore coupons due on Thursday, highlighting the continued issues in China’s property sector, a major consumer of steel.
However, China’s pledges to reduce housing inventory provided some support to ferrous prices.
In the latest development, China’s eastern metropolis of Hangzhou, among the country’s most thriving cities, said it will lift all home purchase restrictions, raising the prospect of other cities following suit.
China’s April iron ore imports rose slightly from last month as lower prices in March encouraged some buyers to place orders for more volumes betting demand and prices will pick up later.