Iron-ore extends losses as Simandou project starts supply
BEIJING - Iron-ore futures prices extended declines on Tuesday, as the big Simandou project in Guinea, west Africa shipped its first ore, raising prospects of more supply at a time when demand in top consumer China is set to decline amid falling steel output.
As of 02:29 GMT, the most-traded iron-ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 was down 1.51% at 751.5 yuan ($106.28) a metric ton, its lowest since July 10 and heading for a fifth straight session of losses.
The benchmark January iron-ore SZZFF6 on the Singapore Exchange fell for a third consecutive session, down 0.94% to $101.1 a ton, as of 02:19 GMT, its lowest since November 10.
The first shipment from the Simandou project has set sail from Guinea, the world's largest iron-ore supplier Rio Tinto said on its WeChat account on Monday.
The project is set to be the world's largest mine for the highest grade of iron-ore with an annual production capacity of 120-million tons.
Supply from Australia and Brazil, the two major iron-ore suppliers, accounts for 80% of China's iron ore imports.
The share will likely fall with more supply from Guinea, said analysts.
The near-month contract will face further pressure amid high supply, swelling inventory and diminishing demand, analysts at broker Xinhu Futures said in a note.
Crude steel output in China is expected to fall below one-billion tons this year, the first in six years.
Other steelmaking ingredients coking coal DJMcv1 and coke DCJcv1 extended falls, down 2.39% and 2.67%, respectively, amid lingering concerns over increasing supply.
Most steel benchmarks on the Shanghai Futures Exchange declined. Rebar SRBcv1 lost 1.5%, hot-rolled coil SHHCcv1 shed 1.27%, wire rod SWRcv1 dipped 0.38% and stainless steel SHSScv1 was little changed.
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