Dalian iron ore falters on firmer supply, lower global steel outlook
By Gabrielle Ng
SINGAPORE, Oct 24 (Reuters) -Dalian iron ore futures prices declined on Thursday, weighed down by stronger supply of the steelmaking ingredient and a softer global steel market outlook.
The most-traded January iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 ended morning trade 1.39% higher at 746.5 yuan ($104.91) a metric ton.
The benchmark November iron ore SZZFX4 on the Singapore Exchange, however, was 0.14% higher at $98.85 a ton, as of 1413 GMT.
Production reports from major miners have shown they have overcome supply disruptions to raise output in recent months, while steel production is falling, ANZ analysts said in a note.
Australia's Fortescue FMG.AX, the world's fourth-largest iron ore miner, on Thursday posted a 4% rise in its first-quarter iron ore shipments but noted a drop in realised prices.
The readings follow higher-than-expected output estimates from other top miners, including BHP BHP.AX, and comes at a time when rivals such as Vale VALE3.SA and Rio Tinto RIO.AX are moving to expand supplies.
China's crude steel output fell to 77.1 million tons in September, declining 6.1% month-on-month and dropping 3.1% from a year ago, World Steel Association data showed on Wednesday.
Japan, one of the world's top five largest steel producers, saw its September crude steel output fall 3.6% from August and 5.8% year-on-year, data from the Japan Iron & Steel Federation showed on Tuesday.
Unless Japan's output picks up in the coming months, the total for the current fiscal ending next March could fall to a four-year low, said consultancy Mysteel.
Further support for iron ore is likely to be sparse as announcements of Chinese stimulus measures come to an end, Westpac analysts said.
Other steelmaking ingredients on the DCE were weaker, with coking coal DJMcv1 and coke DCJcv1 easing 0.97% and 1.8%, respectively.
Steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar SRBcv1 fell 0.57%, hot-rolled coil SHHCcv1 dropped 0.63%, while wire rod SWRcv1 and stainless steel SHSScv1 shed nearly 1.0%.
($1 = 7.1156 Chinese yuan)
Reporting by Gabrielle Ng; Editing by Sumana Nandy
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