Iron ore futures fell on Friday, as traders worried about a dim demand outlook in top steel producer and metals consumer China assessed the prospects of additional stimulus for the world’s second-biggest economy.
The most-traded September iron ore on China’s Dalian Commodity Exchange ended daytime trading 2% lower at 697 yuan ($100.84) a tonne, off a session low of 685.50 yuan, its weakest since May 5.
Dalian iron ore’s benchmark price, however, was on track for a modest weekly gain after clawing back some lost ground.
On the Singapore Exchange, the steelmaking ingredient’s benchmark June contract was up 0.3% at $98.85 a tonne, as of 0709 GMT, after earlier hitting $96.90, its lowest since May 5.
SGX iron ore has slumped more than 20% since hitting this year’s peak at about $131 a tonne in mid-March, as the euphoria over China’s lifting of COVID-19 restrictions and policy support for the struggling property sector had abated.
The current macroeconomic backdrop has turned out uninspiring.
Data on Thursday showed new Chinese bank loans tumbled far more sharply than expected in April, among a slew of downbeat indicators spurring concerns that the economy’s recovery is losing steam and putting pressure on policymakers to roll out additional supportive measures.
Many Chinese steel mills have reportedly lowered their prices amid disappointment over steel demand during the country’s peak spring construction season.
“With the peak construction season coming to an end and with the expected demand recovery not meeting expectations, there is little upside for steel output and iron ore demand recovery in the short to medium term,” said ING commodities strategist Ewa Manthey.
Rebar on the Shanghai Futures Exchange shed 1.5%, hot-rolled coil lost 1.6%, stainless steel dropped 0.7%, while wire rod climbed 0.8%.
Coking coal and coke on the Dalian exchange gained 0.3% and 0.5%, respectively.
Source: Hellenic Shipping News
