Iron ore futures prices closed lower on Tuesday, weighed by steel mills undergoing annual furnace maintenance and rising Chinese port inventories.

The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.26% lower at 778.5 yuan ($110.77) a metric ton.

The benchmark January iron ore (SZZFF6) on the Singapore Exchange was 0.39% lower at $104.35 a ton, as of 0700 GMT.

It is unlikely that the benchmark will break $105, a Singapore-based trader said on condition of anonymity, due to the lack of winter stocking pointing to weak demand, further compounded by price and supply controls that China is trying to implement.

“Most participants will be hesitant to speculate and push prices higher,” said the trader. “Pricing is consolidating and still strong amidst general commodities strength.”

Meanwhile, steel mills are currently in the middle of their blast furnace annual maintenance plans, leading to a wider decline in pig iron production. Port inventories continue to accumulate, indicating a marginal weakening of fundamentals, said Chinese broker Everbright Futures.

Total iron ore stockpiles across ports in China climbed 1.19% week-on-week to about 145.5 million tons, as of December 19, according to SteelHome data.

Meanwhile, the dollar index DXY, which measures the currency against six other units, eased to 98.061 in early trading on Tuesday. It remains on course for a 9.5% drop for the year, its steepest annual fall since 2017.

A weaker greenback makes dollar-denominated assets more affordable to holders of other currencies.

Other steelmaking ingredients on the DCE were up, with coking coal and coke (DCJcv1) up by 1.9% and 0.26%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were mostly up. Rebar edged up 0.19%, hot-rolled coil rose 0.21%, and stainless steel climbed 0.98%, while wire rod dipped 1.29%.
Source: Reuters