Iron ore futures prices experienced a decline on Monday, reflecting ongoing worries about demand in China, the world’s largest consumer of the commodity, and concerns surrounding oversupply amid a lack of substantial measures to stimulate steel consumption. The most-traded September iron ore contract on China’s Dalian Commodity Exchange traded 0.9% lower at 742 yuan per metric ton, while the benchmark May iron ore on the Singapore Exchange was down by 4% at $97 per ton.
Despite China’s positive manufacturing activity data in March, which indicated expansion for the first time in six months according to an official factory survey, iron ore futures faced downward pressure due to a notable increase of 3 million metric tons in Australian iron ore shipments over the past week. This surge in shipments suggests that mine maintenance programs in the first quarter have concluded, potentially leading to rising inventories at major Chinese ports.
Additionally, a private survey revealed that China’s manufacturing activity grew at the fastest pace in 13 months in March, with elevated business confidence driven by increased new orders from domestic and international customers. However, these positive indicators did not prevent the decline in iron ore prices. Coking coal and coke prices also retreated on the DCE, with soft demand contributing to a downturn in steel benchmarks on the Shanghai Futures Exchange.