Iron ore prices declined as Chinese steel mills continued to face profit pressures amid an uncertain demand outlook in the world’s largest steel-consuming market.
Futures in Singapore fell by 1.4% to $103.20 per ton, heading for a second consecutive weekly loss. Bloomberg Intelligence reported that the $100 per ton support level is under growing pressure in the fourth quarter due to weaker Chinese fixed-asset investment and declining steel mill profitability, highlighting the fragile market fundamentals.
Reports also indicated that iron ore inventories at Chinese mills and ports have risen following record-high import levels, while Guinea prepares to launch the first shipment from its massive Simandou iron ore project. According to BMI, a unit of Fitch Group, the inventory buildup has prompted Chinese steelmakers to scale back their raw material purchases.
By midday, iron ore futures in Singapore stood at $103.75 per ton, down 0.9%, while yuan-denominated contracts in Dalian and steel futures in Shanghai also declined.
Sources: Bloomberg, Mysteel, BMI.