Iron ore futures prices moved sideways on Wednesday, with the Dalian benchmark extending its decline to a third straight session, as weakening fundamentals of the key steelmaking ingredient outweighed more property stimulus in top consumer China.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 1.11% lower to 891 yuan a metric ton after falling more than 2% on Tuesday.
The benchmark June iron ore on the Singapore Exchange was, however, 0.81% higher at $118.85 a ton.
“I am not that optimistic about iron ore, as the hot metal output is close to a ceiling while supply has hovered at a relatively high level,” said Chu Xinli, a Shanghai-based analyst at China Futures, adding that persistently rising portside stocks are further weighing on prices.
The persistent price decline came even as China’s city of Shenzhen, a key technology and manufacturing hub, will lower the minimum down payment ratio required of first-time home buyers to 20%, while southern city Guangzhou will lower the ratio to 15%, local media reported on Tuesday.
The commercial hub Shanghai announced on Monday to lower the ratio for first home purchases to 20% and cut the ratio for second home purchases to 30% for suburban areas and to 35% for the rest of the city.
Other steelmaking ingredients on the DCE were mixed, with coking coal dropping 1.06% and coke edging up 0.38%.
Steel benchmarks on the Shanghai Futures Exchange were broadly down. Rebar dipped 0.4%, hot-rolled coil lost 0.21%, wire rod fell 0.67%and stainless steel shed 0.17%.
“Steel fundamentals turned weaker with rebar demand falling at a faster-than-expected pace while destocking of steel products slowed,” analysts at Yongan Futures said in a note.
Source: Hellenic Shipping News
