China's iron ore futures steadied on July 18, with market participants reassessing the supply outlook amid indications of a rebound in shipments of the steelmaking raw material from Australia and Brazil.
The most-actively traded September iron ore contract on the Dalian Commodity Exchange (DCE) was down 0.1% at 893 yuan/t ($129.87/t) as of 0300 GMT, after climbing as much as 1.3% earlier in the session.
"Demand is pretty good, but on the supply side there's a little bit of change in the momentum," said Helen Lau, mining and metals analyst at Argonaut Securities in Hong Kong.
The market seems to have taken a pause, she said, following the sustained rally this year that had pushed the Dalian iron ore to a record high of 924.50 yuan/t on July 16.
After July 16's rally, the DCE announced an increase in transaction fees for Dalian iron ore trades, effective July 18, which may curb trading activity and, thus, volatility in prices, some analysts said.
The Dalian iron ore benchmark has more than doubled this year, amid supply outages from top exporters Australia and Brazil, and robust demand in China - the world's top steel producer and consumer.
Iron ore shipments to China from Australia's Port Hedland terminal rose more than 11% in June from a month earlier, port data released on July 17 showed.
The Baltic Exchange's main sea freight index, which tracks rates for ships ferrying dry bulk commodities, rose on July 17, extending gains for a seventh straight session amid strong demand for vessels that ship iron ore from Brazil.
Benchmark spot 62% iron ore for delivery to China steadied at $123/t on July 16, near the five-and-a-half-year high of $126.50/t hit on July 3, data showed.
The most-active October construction steel rebar contract on the Shanghai Futures Exchange edged down 0.3% to 4,022 yuan/t. Hot-rolled steel used in cars and home appliances slipped 0.2% to 3,902 yuan/t.
Other steelmaking inputs were also little changed, with Dalian coking coal down 0.3% to 1,411 yuan/t, while coke edged up 0.1% to 2,193.50 yuan/t.
Chinese customs is no longer permitting coal cargoes to enter the country at the ports of Jingtang and Caofeidian, said three coal traders, who were told by customs officials of the halt on July 16.
Source:sxcoal
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