MANILA: Dalian and Singapore iron ore futures slumped on Thursday as market participants turned cautious after early gains, driven partly by lingering concerns over supply of the steelmaking ingredient from Brazil, pushed prices above $100 a tonne.

Iron ore's most-traded September contract on China's Dalian Commodity Exchange ended down 2.1% at 737 yuan ($103.49) a tonne, after rising 2.3% in early trade.

Iron ore for June delivery on the Singapore Exchange fell 1.7% to $99.18 a tonne in afternoon trade, after rising to $101.30 a tonne in morning trade.

The market volatility continued for a second straight day, after the Dalian exchange asked its members on Tuesday to act “rationally" in iron ore futures trade as prices held above $100 a tonne despite “uncertainties".

The exchange has vowed to strengthen daily market surveillance and deal with all kinds of violations to maintain market order.

While supporting fundamentals for iron ore including falling inventories in China and prospects of tighter supply from coronavirus-hit Brazil remain intact, prices above $100 a tonne are deemed unsustainable.

“I expect prices to stay close to the $100 level until towards the end of June," said OCBC economist Howie Lee in Singapore.

However, he said prices at this level may not be sustainable for the smaller mills in China and that the $80-$90/tonne level seems “more palatable for steel margins at present".

Benchmark 62% iron ore's spot price retreated from a 10-month high to $101.50 a tonne on Wednesday, SteelHome consultancy data showed.

Construction steel rebar on the Shanghai Futures Exchange slipped 0.9%, after scaling a new peak since February 2011 earlier in the session.

Hot-rolled coil was down 1.7%, while stainless steel dipped 1.8%.

Coking coal gained 0.2%, while coke advanced 1.4%.

Copyright Reuters, 2020