On Wednesday, iron ore futures prices experienced a decline amidst growing inventories at Chinese ports, despite expectations for increased intervention in the nation’s struggling property sector.
The most active September iron ore contract on China’s Dalian Commodity Exchange (DCE) concluded daytime trading 2.91% lower at 866 yuan ($119.85) per metric ton.
This drop reversed gains made during a 2.63% surge on Monday, the first trading day following China’s May Day public holiday.
The rally followed a statement from the Politburo indicating that authorities would explore policies and measures to reduce housing inventory, aiming to mitigate risks in the real estate market.
Shanghai-based analyst Pei Hao from international brokerage Freight Investor Services (FIS) explained, “Due to the end of the Chinese holiday, iron ore inventory replenishment speculation has ended.
In addition, arrivals at the port during the working days of May continue to be high, and the port inventory is at a seasonal high.” He further noted, “The fundamental factors are bearish this week.”
Iron ore imports in China, the world’s largest consumer, are anticipated to remain similar to last year, ranging from 1.17 billion to 1.18 billion metric tons, according to a senior official from miner Vale.
Meanwhile, other steelmaking ingredients on the DCE also experienced declines, with coking coal down 4.72% and coke down 3.91%.
Steel benchmarks on the Shanghai Futures Exchange registered slight decreases as well, with rebar down 1.47%, hot-rolled coil easing 1.63%, wire rod declining 1.72%, and stainless steel slipping 1.84%.
