BENCHMARK iron ore futures in China fell more than 2 percent yesterday, hit by concerns of production and transportation disruptions, after the country reported cases of the Omicron variant of the coronavirus over the weekend.

The northern coastal city of Tianjin has tightened exit controls after detecting local Omicron cases. The central Henan Province also reported two local Omicron cases on the same transmission chain.

“The Tianjin outbreak over the weekend may provide some immediate downside shocks to prices should infection rates escalate and additional lockdown be imposed,” said Atilla Widnell, managing director at Navigate Commodities, Singapore.

The most traded iron ore futures on the Dalian Commodity Exchange, for May delivery, dropped 2.2 percent to 698 yuan (US$109.52) per ton.

Spot prices of iron ore with 62 percent iron content for delivery to China, meanwhile, increased US$1 to US$128.5 per ton Friday, according to SteelHome consultancy.

“Looking further forward, the market looks well supported by sentiment around a post-Beijing Winter Olympics, partial stimulus-fuelled steel demand recovery,” Atilla added.

Dalian coking coal futures sat tight at 2,266 yuan a ton and coke prices inched 0.2 percent higher to 3,148 yuan per ton.

Steel prices on the Shanghai Futures Exchange were mixed.

Construction used steel rebar dipped 0.04 percent to 4,486 yuan per ton and hot rolled coils, used in the manufacturing sector, slipped 0.4 percent to 4,625 yuan a ton.

Shanghai stainless steel futures, for February delivery, jumped 2 percent to 17,175 yuan per ton. (SD-Agencies)