BEIJING — Iron ore futures slipped on Monday to their lowest in a week, hurt by thinner steel margins and anticipation of weaker demand due to the production curbs ahead of a military parade in top consumer China.
By 0156 GMT, the most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) DCIOcv1 fell 3.11 percent to 762.5 yuan ($106.60) a metric ton, the lowest since August 20.
By 0146 GMT, the benchmark October iron ore SZZFV5 on the Singapore Exchange lost 2.24 percent to $101.15 a ton, the weakest since August 25.
Narrower steel margins, coupled with the expectation of lower hot metal output, put pressure on ore prices, broker Hongyuan Futures said.
Analysts see hot metal output, a gauge of iron ore demand, falling dramatically due to the production restriction in northern regions of China.
Steelmakers in Tangshan, China’s top steelmaking hub, have implemented production control to ensure better air quality for a military parade on September 3 to commemorate the end of World War Two, curbing ore demand.
Subdued steel demand, dragged by protracted property woes at home, has squeezed steel margins, denting appetite for raw materials.
China’s manufacturing activity shrank for a fifth straight month in August, an official survey showed on Sunday, suggesting domestic demand remains sluggish.
Coking coal DJMcv1 and coke DCJcv1, other steelmaking ingredients, slumped to their lowest in four weeks, down 4.24 percent and 4.17 percent, respectively.
Most steel benchmarks on the Shanghai Futures Exchange retreated. Rebar SRBcv1 lost 2.11 percent, hot-rolled coil SHHCcv1 slid 1.58 percent, wire rod SWRcv1 fell 1.27 percent, while stainless steel SHSScv1 rose 0.51 percent.
