Os iron ore future prices reached multi-month lows on Monday (10), amid concerns about demand in China and rising port inventories, although the drop in shipments helped to reduce some losses in afternoon trading.
The January contract for the most traded iron ore on China’s DCE (Dalian Commodity Exchange) ended the day’s trading with little change, at 765 yuan (US$107.40) a ton. At the beginning of the session, the contract reached its lowest level since July 10, at 756 yuan.
Benchmark iron ore for December on the Singapore Exchange rose 0.72% to US$102 per ton, after earlier reaching its lowest level since September 1, at US$100.85.
Prices were supported by a reduction in global shipments, which fell to the lowest level in two months, according to data from consultancy Mysteel.
Other signs of easing trade tensions between China and the United States have also increased risk appetite.
China said on Monday it would suspend port fees charged to US-bound ships for a year.
Meanwhile, data showing that producer price deflation in China eased in October and consumer prices returned to positive also boosted sentiment.
However, price gains were held back by pressure from lower demand amid broader steel production cuts.
This came even though some regions in northern China, including the main steel production hub Tangshan, lifted production controls for environmental protection from Sunday.
Resilient raw material prices and decreasing downstream demand have squeezed steel margins, prompting some mills to begin equipment maintenance, analysts said.
