Iron ore futures extended losses, with the Chinese Dalian benchmark touching a fresh two-week low, as China’s rising port inventories and softening physical demand for steel products weighed on sentiment, Reuters reports.
Portside iron ore stocks in top steel producer China also rose to a seven-month high of 123.6 million tonnes last week, SteelHome consultancy data showed. As major suppliers Australia and Brazil continued to ramp up shipments, and with current Chinese demand for steel products and raw materials relatively soft, stocks may continue piling up.
China’s high steel output, coupled with slow destocking, have recently bloated domestic inventories, pressuring prices. China is reportedly set to issue new steel scrap standards in a move that will allow materials meeting them to enter the country after a ban on solid waste imports goes into effect.
China’s steel production also dipped in early October. The China Iron and Steel Association (CISA) reported that crude steel output across major mills in China averaged 2.17 million tonnes per day in the first 10 days of October, up 0.58 per cent from late September and up 14.9 per cent from the same period a year ago.
Average daily production of pig iron across those mills rose 162 per cent from late September to 1.92 million tonnes in early October and up 12.3 per cent from the same period a year ago, while that of steel products dropped 2.52 per cent to 1.98 million tonnes in early October but up 14.5 per cent from the same period a year ago.
As on October 10, inventories of steel products across those mills stood at 13.59 million tonnes, up 2 million tonnes or 17.22 per cent from the end of September.