Iron ore futures have experienced a decline for the second consecutive session as a result of increased shipments from Australia and Brazil, coupled with a slowdown in demand from China, the leading consumer. The September iron ore contract on China’s Dalian Commodity Exchange closed down by 0.43%, settling at 702.5 yuan, equivalent to $97.97 per metric ton. Similarly, the benchmark July iron ore price on the Singapore Exchange dropped by 0.25%, reaching $92.75 a ton as of 0728 GMT.
Recent data from Chinese consultancy Mysteel indicated that the total volume of iron ore shipments from Australia and Brazil surged to 30.1 million tons during the period from June 16 to 22, marking a one-year high. Analysts from ANZ noted that iron ore prices have continued to decline due to steady supply levels and anticipated that Chinese imports may decrease further. This decline is particularly pronounced as construction activity typically slows down during the summer months.
In other industry news, Rio Tinto, which stands as the world’s largest iron ore producer, has secured government approvals for its Hope Downs 2 project in Australia. This joint venture with Hancock Prospecting is expected to have an annual production capacity of 31 million tons, with Rio Tinto planning to invest over $13 billion in new mines and equipment over the next three years. In the context of steel production, the British government is poised to introduce more stringent trade caps on steel in an effort to bolster its domestic industry amid a global oversupply.
On the Dalian Commodity Exchange, prices for other steelmaking components rose, with coking coal and coke increasing by 0.75% and 1.46%, respectively, although most steel benchmarks on the Shanghai Futures Exchange recorded declines.