Iron-ore futures prices flitted within a tight range on Tuesday, as traders weighed resilient near-term demand in China against the potential of improved supply from top producer Australia.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) DCIOcv1 held its ground at 706.5 yuan ($98.45) a metric ton, as of 03:10 GMT.
The benchmark July iron ore SZZFN5 on the Singapore Exchange edged 0.18% lower to $93.7 a ton.
Hot metal production, a gauge of iron-ore demand, inched up 0.24% to 2.422-million tons week-on-week, as of June 20, according to data from Chinese consultancy Mysteel.
“Volumes have stayed around 2.4-million tons since April, suggesting resilience in the world’s largest steel market,” ANZ analysts said.
Still, the steel market is pricing in expectations of weaker seasonal demand, Hexun Futures said in a note.
“Chinese prices for imported iron ore continued to dip during June 16 to 20, as the seasonal fall in steel consumption during summer undermined demand for the steelmaking material,” said Mysteel in a separate note.
On the supply front, Rio Tinto, the world’s largest iron ore producer, is entering a joint venture with Hancock Prospecting to develop the Hope Downs 2 project in Western Australia.
The two iron-ore pits will have a combined total annual production capacity of 31-million metric tons, Rio said in a statement.
Other steelmaking ingredients on the DCE traded sideways, with coking coal DJMcv1 up 0.06% and coke DCJcv1 down 0.83%.
“Overall, the intensified Middle East conflict has not exerted much direct impact on the ferrous market, but coking coal prices somewhat benefited from energy concerns,” said Jiang Mengtian, chief analyst at consultancy Horizon Insights.
Steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar SRBcv1 eased 0.13%, hot-rolled coil SHHCcv1 dipped 0.16%, wire rod SWRcv1 inched 0.75% lower and stainless steel SHSScv1 fell around 1%.