Iron ore futures prices slipped on Friday and were on track for a fourth straight weekly loss, amid talk in the market of a cap on crude steel output in top consumer China.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trade down 1.7% at 811.5 yuan ($111.76) a metric ton, the lowest since June 17. It posted a weekly fall of 1.8%.
The benchmark July iron ore SZZFN4 on the Singapore Exchange was down 1.59% at $105 a ton, as of 0708 GMT. It lost 2.3% week-on-week.
“It’s mainly the various market talks of steel production cut that weighed down iron ore prices this week,” said Pei Hao, an analyst at the international brokerage Freight Investor Services.
“When the talk of the scale of cut is lower than expected, prices rebounded, and vice versa, so we are seeing prices have been swinging up and down quickly.”
Heated chatter on steel production curbs was sparked after authorities in Fujian met with local steelmakers on Monday to discuss details about output restrictions this year.
The Provincial Department of Industry And Information Technology has yet to respond to a Reuters fax requesting comment sent on Tuesday.
But the currentresilient demand prevented ore prices from falling more significantly, said analysts.
Average daily hot metal output among steelmakers surveyed rose for a second straight week to its highest since November 2023, rising 0.3% to around 2.4 million tons in the week to June 21, data from consultancy Mysteel showed.
“There is limited upside room for iron ore demand,” said Chu Xinli, an analyst at China Futures, citing that some provinces were heard to have issued guidance on steel restrictions, the property data remained subdued and steel demand has seasonally slowed.
Other steelmaking ingredients on the DCE receded, with coking coal DJMcv1 and coke DCJcv1 down 1.89% and 1.99%, respectively.
Steel benchmarks on the Shanghai Futures Exchange posted loss. Rebar SRBcv1 shed 1.19%, hot-rolled coil SHHCcv1 lost 0.77%, wire rod SWRcv1 dropped 1.51% and stainless steel SHSScv1 slipped 0.75%.