Market Outlook: Iron Ore in Singapore Falls Below $100/Ton as China's Pre-Holiday Stockpiling Nears Completion
Forex - Iron ore futures in Singapore declined below the key psychological level of $100 per ton as some traders liquidated long positions due to a decrease in demand after most steel producers in China completed their pre-holiday raw material stocking.
The benchmark February iron ore contract on the Singapore Exchange fell 2.67% to $98.2 per ton at 06:53 GMT, marking its lowest level since November 18.
The May iron ore contract on the Dalian Commodity Exchange (DCE) ended morning trading at 762.5 yuan per ton ($104.46), down 2.37%, the lowest level since December 30.
Both benchmarks are on track for their third consecutive weekly decline, with the seasonally decreasing demand for the essential steel production material contributing to this drop. Dalian iron ore is down 16% in 2024, while the Singapore benchmark has fallen 18.5%.
According to consultancy firm Mysteel, the average daily hot metal production of surveyed steel producers dropped for the seventh consecutive week, decreasing by 1.2% to 2.25 million tons as of January 2, marking the lowest level since the end of September.
The Chinese New Year begins on January 28, and domestic steel producers typically stockpile in order to meet production needs during and after the holiday.
Coking coal and coke on the DCE fell by 2.34% and 3.16%, respectively.
In the Shanghai Futures Exchange, rebar dipped by 1.27%, hot-rolled coil by 1.32%, and stainless steel by 0.63%.
Despite Beijing reiterating its support for a subsidy program for large-scale equipment upgrades and durable goods exchange for businesses, the iron market remained weak.