BEIJING: Dalian iron ore futures prices extended declines to hit a five-month low on Tuesday, pressured by weak sentiment amid lingering subdued demand in top consumer China.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 3.35% lower at 822 yuan ($114.54) a metric ton, its lowest since Oct. 11.
The underlying driving force to this round of price fall in raw materials is the slow demand recovery from the downstream sectors, said Chu Xinli, a Shanghai-based analyst at China Futures.
China’s latest National People’s Congress meeting didn’t ease prospects for the property market and a weak start to the construction season is boding ill for steel demand, analysts at ANZ bank noted.
Moody’s said on Monday it withdrew ‘Baa3’ rating for Vanke , China’s No.2 developer by sales, and assigned ‘Ba1’ corporate family rating (CFR), adding that all of Vanke’s ratings would be on “review for downgrade.” “Deteriorating fundamentals contributed to price weakness as many steelmakers have been cautious about restocking ore when their production resumption pace has been dragged by tepid downstream demand; and we expected price to consolidate between 800 and 820 yuan a ton in the near term,” Chu added.
The benchmark April iron ore on the Singapore Exchange was, however, 0.42% higher at $107.7 a ton, as of 0330 GMT, supported by stronger bets on the US Federal Reserve cutting its key interest rate in June. Other steelmaking ingredients on the DCE slid, with coking coal and coke down 0.27% and 0.8%, respectively.
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