Iron ore futures in China and Singapore dropped on Tuesday as recovering supply from top exporters – Australia and Brazil – put pressure on the raw material after its best quarter in more than three years.
Supply disruptions, partly due to unfavourable weather, helped lift iron ore prices early this year.
“If you look at seaborne shipments especially from Australia on a weekly basis, they are starting to show some increase. Supply from Brazil is also recovering,” said Wang Di, analyst at CRU consultancy in Beijing.
But Chinese demand for iron ore remains moderate, said Wang.
Iron ore shipments to China from Australia’s Port Hedland, used by miners such as BHP Billiton , rose to 32.59 million tonnes in March from 29.14 million tonnes in February, data showed on Tuesday.
The most-traded September iron ore on the Dalian Commodity Exchange closed down 0.8 percent at 382 yuan ($59) a tonne, after falling as far as 372 yuan. Chinese markets were shut on Monday for a public holiday.
On the Singapore Exchange, the most-active June iron ore slid 2.1 percent to $49.36 a tonne by 0721 GMT.
The losses come after a strong quarter for the steelmaking ingredient that saw the spot price rise 24 percent, outpacing gains in other industrial commodities as well as gold.
A surge in Chinese steel pricing on expectations of firm seasonal demand from March through May spurred similar gains in iron ore. But the raw material has come off March highs.
“We do not believe current iron ore prices are sustainable and should soften through 2016,” Argonaut Securities analyst Helen Lau said in a note.
Iron ore for immediate delivery to China’s Tianjin port .IO62-CNI=SI was unchanged at $54 a tonne on Monday, according to The Steel Index, amid limited trading activity with China’s holiday.
The spot benchmark touched a nearly nine-month high of $63.30 on March 8.
With commodity prices at historic lows, top iron ore miner Vale SA said it would sell its entire 26.87 percent stake in the struggling CSA steel plant to Germany’s ThyssenKrupp for a token value, in a bid to focus on core mining businesses.
The most-traded October rebar on the Shanghai Futures Exchange climbed 1.3 percent to close at 2,194 yuan a tonne.
Major Thrust on The Development of Inland Waterways, Rs 22,000 Cr Expected Expenditure Envisaged: Mr. Pravir Pandey
India Tanker Shipping Trade Summit 2018