Iron ore futures clinged to gains after four consecutive sessions of losses. The basic raw material used in the production of steel however moved within tight ranges as China’s warning against hoarding and speculation kept market participants cautious.
The most-traded iron ore for September delivery on China’s Dalian Commodity Exchange was up 0.8per cent at 1,066.50 yuan ($166.36) a tonne.
The most-liquid June contract on the Singapore Exchange was up 0.8percent at $183.95 a tonne.
Beforehand, Dalian iron ore slipped to its weakest in nearly six weeks with the most active SGX contract stumbling to a four-week low, after Chinese government officials cautioned industrial metals companies against disrupting normal market order. To further curb price inflation,Chinese market regulators enforced more stringent trading limits for iron ore and steel products on the Dalian and Shanghai commodity exchanges.
Boosted by the rebound in iron ore prices, construction steel rebar on the Shanghai Futures Exchange rose 0.2per cent but hot-rolled coil was unable to join the bullish trend as it plunged 0.2 per cent.
Commenting on iron ore’s rebound, Atilla Widnell, managing director at Navigate Commodities in Singapore said increased commodity futures market oversight by Chinese government agencies is likely to keep a lid on further speculative rallies for the time being.