Iron ore futures extend losses over rising Covid cases in China

DALIAN iron ore futures extended their losses for a third straight session on Wednesday (Nov 23), as worries over rising Covid-19 cases in China – the world’s top steelmaker – weighed on market sentiment.

The most-traded January iron ore on China’s Dalian Commodity Exchange ended daytime trade 0.4 per cent lower at 732.5 yuan (S$141.55) a tonne, off an earlier low.

On the Singapore Exchange, the benchmark December iron ore was up 1.7 per cent at US$95.05 a tonne, as at 0715 GMT.

Beijing shut parks and museums on Tuesday and Shanghai tightened rules for people entering the city, as Chinese authorities grappled with a spike in Covid-19 cases that has deepened concern about the economy and dimmed hopes for a quick reopening.

Mainland China’s Health Commission reported 29,157 new coronavirus cases for Nov 22, compared with 28,127 new cases a day earlier.

Any hopes of gains stemming from a boost in demand from the measures to support China’s property sector have been snuffed out by the prospect of rising supply, ANZ said.

In Brazil, daily average exports of iron ore in the first third of November were tracking above year-ago levels, while in Australia, bulk export terminal Port Hedland recently set a record for flows in the month of October, it added. Asian share markets mostly rose on Wednesday, but oil and the US dollar slipped as rising Covid-19 cases in China raised fears of fresh lockdowns that could slow the reopening of the world’s second-largest economy.

Investors are keenly waiting for the release of the US Federal Reserve minutes from its November policy meeting due later on Wednesday, as they look for any hints for the pace of future interest rate hikes.

The most active rebar contract on the Shanghai Futures Exchange gained 0.1 per cent, wire rod edged higher by 0.4 per cent, while stainless steel dipped 0.2 per cent, and hot-rolled coil inched lower by 0.1 per cent.

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Dalian coking coal and coke rose 0.9 per cent and 0.3 per cent respectively. REUTERS