Iron ore futures prices extended losses on Friday to their lowest level in two weeks and were set for a weekly fall, as concerns persisted over the recovery in the property sector in top consumer China.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) closed morning trade 2.08% lower at 942.5 yuan ($131.28) a metric ton, marking its lowest since Jan. 19. It has fallen over 5% through the week.
Meanwhile, the benchmark March iron ore on the Singapore Exchange tumbled 3.47% to $126.45 a ton, as of 0332 GMT, logging its lowest level since Jan. 18. It posted a decline of more than 6% so far this week.
“China’s property sector woes continue to linger… the outlook for domestic steel demand from this sector remains bleak, with demand from social housing and renewable energy only partly offsetting it,” analysts at ANZ bank said in a note.
“Moreover, pressure is mounting on China’s steel industry to reduce emissions. Renewed output curbs will be a new headwind for iron ore demand,” they added.
Concerns over demand prospects resurfaced in the wake of Evergrande fallout.
Iron ore at one-week low on weak China data
A Hong Kong court on Monday ordered the liquidation of debt-saddled property giant China Evergrande Group.
Fitch Ratings said Evergrande’s liquidation could have wider effects for investment, property.
Other steelmaking ingredients on the DCE also lost grounds, with coking coal and coke down 0.87% and 0.92%, respectively.
Steel benchmarks on the Shanghai Futures Exchange recorded additional declines. Rebar lost 1.16%, hot-rolled coil slipped 0.97%, wire rod shed 0.93% and stainless steel fell 1.05%.
The weakness in the ferrous market persisted despite a series of stimulus measures to support the troubled property sector in the world’s second-largest economy.
China’s central bank issued 150 billion yuan in loans to policy banks through its pledged supplementary lending (PSL) facility in January, granting such loans for a second month as part of a push to support its “urban village” plan.
Comments
Comments are closed for this article.