MANILA: Benchmark futures prices of steel and steelmaking ingredients including iron ore fell on Monday, surrendering some of their last week’s gains on persistent worries about China’s sluggish property sector.
The most-traded September iron ore on China’s Dalian Commodity Exchange ended morning trade 1.6% lower at 724 yuan ($104.74) a tonne. On the Singapore Exchange, the most-active June iron ore contract dropped as much as 2.7% to $102.55 a tonne, its weakest since May 15. Prices of the steelmaking ingredient climbed 6% last week in Singapore, marking their biggest weekly gain in seven, as hopes grew for more policy stimulus to shore up top steel producer China’s patchy economic recovery.
China will take more targeted measures to expand domestic demand and stabilise external demand in an effort to promote a sustained economic rebound, Premier Li Qiang was quoted by state radio as saying on Thursday.
“One of the main problems with sentiment-driven rallies is that they’re incredibly fragile unless fundamentals play catch up sooner rather than later - which is highly unlikely for now,” said Navigate Commodities managing director Atilla Widnell.
A slower pace of home price gains in China, along with last week’s bearish data showing a sharp fall in property investment and sales, has raised doubts about the strength of recovery in the real estate sector, a key driver of steel demand and crucial to the health of China’s economy.
Comments
Comments are closed for this article.