Iron ore futures in China fell on Monday, as a rising death toll from the coronavirus outbreak dimmed demand prospects for the steelmaking raw material, and as stocks piled up at the country’s ports amid industry shutdowns.
The Dalian Commodity Exchange’s most-traded iron ore contract, expiring in May, ended the session down 0.7% at 581.50 yuan ($83.30) a tonne. It tumbled 11% last week, marking its biggest weekly loss in six months.
On the Singapore Exchange, the front-month March iron ore contract dropped 1.2% to $79.65 a tonne in afternoon trade.
Spot iron ore prices also sank last week, with the benchmark 62% grade for delivery to China shedding 14.3% to $83 a tonne, according to SteelHome consultancy.
The epidemic has caused huge disruptions in the world’s second-largest economy, with the country’s usually bustling cities becoming ghost towns as authorities ordered virtual lockdowns, cancelled flights, and shut factories and schools.
However, workers began trickling back to offices and factories around China on Monday as the government eased some restrictions on work and travel.
Amid weak demand and with many ports in China remaining shut after the extended Lunar New Year holidays, iron ore port inventory rose to 131.1 million tonnes last week, the highest since early November 2019, SteelHome data showed.
“In the short term, it will be more difficult for the physical enterprise supply and demand … and logistics to fully recover to pre-holiday levels,” SinoSteel Futures Co Ltd in Beijing said in a note.
The demand for steel products will likely slow down at the start of spring in China in March, it added, instead of picking up as seasonally expected.
Operations at Australia’s Port Dampier and Port Hedland, the world’s largest iron ore port, meanwhile were “returning to normal” after tropical cyclone Damien made landfall on Saturday over the country’s west coast, ING analysts said in a note.
FUNDAMENTALS
* The death toll from the outbreak in China rose by 97, the largest in a single day so far, to 908 as of the end of Sunday, surpassing the number of deaths from the SARS epidemic in 2002/2003.
* Construction steel rebar on the Shanghai Futures Exchange was down 0.1%, while hot-rolled steel coil was virtually flat.
* Coking coal slipped 0.3% while coke gained 0.6%.
* Stainless steel was up 0.3%.
Source: This news has been taken from https://www.hellenicshippingnews.com/
