Iron ore in Dalian declines as China intervenes to control prices

The most traded iron ore for January on China’s Dalian Commodity Exchange (DCE) closed 1.5% lower.

Reuters


16 November 2023 at 09:30

Valley mining in Minas Gerais (Mario Tama/Getty Images)

SINGAPORE (Reuters) – Iron ore futures fell on the Dalian Stock Exchange on Thursday as Chinese authorities intervened to control high prices and weak data from the real estate sector fueled concerns about demand for iron ore in the key steel-consuming sector.

The most traded iron ore for January on China’s Dalian Commodity Exchange (DCE) closed 1.5% lower, at 956 yuan ($131.77) per ton, after rising 1% in the previous session.

On the Singapore Stock Exchange, the reference iron ore for December rose 0.1%, to $130.04 per ton.

“The recent rise in iron ore prices due to sentiment has caught the attention of the Chinese authorities,” said Attila Widnell, managing director at Navigate Commodities.

“The National Development and Reform Commission (NDRC) is investigating what it considers to be ‘excessively high’ prices, and Dalian has adjusted trading limits for iron ore futures.”

The DCE on Wednesday set a maximum daily trading volume for iron ore futures at no more than 500 lots in contracts for January-May 2024 delivery.

“The downward shock should only be temporary, with optimistic investors seizing the opportunity to buy on dips,” Attila said.

New home prices in China fell for a fourth month in October, according to official data, as government support measures did little to dispel the gloom hanging over the country’s consumers and debt-laden real estate sector.

Crude steel production also fell for the fourth straight month in October, according to data released on Wednesday, as more mills carried out furnace maintenance amid shrinking profit margins and disappointing demand in the peak consumption season.