Iron ore has been on a rollercoaster ride, initially dipping well below $100 a tonne before rebounding sharply following Chinese data that painted a mixed picture of steel demand. Bloomberg writes about this.
Futures, which fell more than 13% last week, lost as much as 2.9% to $97 per ton in Singapore, and then rose even more. While China's overall growth was supported by rising industrial production and investment at the start of the year, the country's steel output was only marginally higher in the first two months.
Iron ore prices are still down more than a quarter from beginning of the year, making it one of the weakest performers among major commodities. The slump was mainly driven by concerns about demand in China, where officials are grappling with a long-running crisis in the country's steel real estate sector. Against this backdrop, some plants are cutting production.
“Signs of weaker demand continue to emerge, with Chinese steel mills announcing production cuts,” ANZ Group Holdings Ltd. analysts, including Daniel Hines, said in a note.
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Iron ore stocks at ports in China, the world's largest importer, are rising, indicating abundant supplies. Inventories rose to 140.9 million tonnes last week, the highest level in more than a year.
Iron ore for April delivery traded 3.9% higher at $103.80 a tonne in Singapore, while yuan futures in Dalian ended the session higher. Steel contracts in Shanghai were stronger.
