SINGAPORE: Dalian iron ore futures fell on Friday for a second session, dragged down by higher portside stocks of the key steelmaking ingredient in top consumer China, although expectations of demand improving kept prices on track for a weekly gain.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) closed morning trade 0.55% lower at 816 yuan ($116.92) a metric ton.
The contract has risen 3.4% so far this week.
The benchmark February iron ore on the Singapore Exchange was 0.37% higher at $108.25 a ton by 0337 GMT, rising 2.7% so far this week.
Inventories of imported iron ore at major Chinese ports have risen for a seventh consecutive week, up 1.9% week-on-week at 162.7 million tons by January 8, close to the record high of 162.8 million tons, data from consultancy Mysteel showed.
Steel inventories rose 1.9% week-on-week, as per Mysteel data, also weighing on sentiment.
Losses in Dalian iron ore futures were curbed by firm near-term demand and expectations of feedstocks restocking by steelmakers ahead of the Lunar New Year holiday in February. Additionally, investors also digested the latest Chinese inflation data.
China’s annual consumer price inflation accelerated to a 34-month high in December, but the full-year rate slumped to the lowest in 16 years while producer deflation persisted, backing market expectations for more stimulus to shore up soft demand.
Other steelmaking ingredients on the DCE traded lower, with coking coal and coke down 1.08% and 2.13%, respectively.
Steel benchmarks on the Shanghai Futures Exchange lost ground.
Rebar shed 1.04%, hot-rolled coil dipped 1.11%, wire rod nudged down 0.03% and stainless steel retreated 0.43%.
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