Iron ore slips on high inventories despite steady hot metal output

Iron ore futures drifted lower on Thursday, as high inventories that underscored steady blast furnace production left little room for price hikes. The most-traded May iron ore contract on China's Dalian Commodity Exchange (DCE) ended daytime trade down 1.73% at 768.5 yuan ($110.72) a metric ton, declining for the fourth consecutive session. The benchmark March iron ore on the Singapore Exchange was 1.71% lower at $100.75 a ton as of 0707 GMT. The blast furnace utilisation rate increased marginally, and daily hot metal output climbed by 21,000 tons week-on-week, data from the Shanghai Metals Market released on Wednesday showed. However, high iron ore inventories limited price gains, as most steel mills have largely completed pre-Lunar New Year restocking. Several electric-arc furnaces in Anhui and Yunnan-Guizhou regions have scheduled planned maintenance prior to the Lunar New Year. However, they plan to resume production earlier than expected, driven by profitability concerns. Other steelmaking ingredients on the DCE languished, with coking coal and coke down 2.25% and 0.77%, respectively. Most steel benchmarks on the Shanghai Futures Exchange retreated. Rebar lost 0.29%, hot-rolled coil fell 0.4% and wire rod shed 1.1%. Meanwhile, stainless steel rose 0.69%.