MANILA: Iron ore futures fell in Singapore on Wednesday, while the Dalian benchmark contract swung back and forth, as a crisis engulfing property developers in top steel producer China outweighed improving margins at mills.
Iron ore’s front-month September contract on the Singapore Exchange was down 1.6% at $112.85 a tonne, as of 0330 GMT, extending losses to a fourth session.
On China’s Dalian Commodity Exchange, the steelmaking ingredient’s most-traded September contract ended volatile morning trade up 0.4% at 796 yuan ($117.88) a tonne.
After last week’s solid gains for iron ore, sentiment has turned shaky. A private survey showed on Monday that China’s July new home prices and sales volume both fell from a month earlier.
Already grappling with a debt crisis and weak demand, China’s property market has been further rocked recently by a mortgage boycott. Analysts said confidence is unlikely to be quickly restored despite government support for the industry.
“The recovery will be slow and gradual, with two major uncertainties ahead: the impact of recent mortgage boycotts on homebuyers’ confidence (and) revival of more lockdowns,” J.P.Morgan analysts said in a note.
China’s ailing property sector and its decarbonisation goal, which entails cutting annual steel production for a second straight year, remain key concerns for iron ore traders, though rebounding steel margins offer support.
A total of 23 blast furnaces in China resumed production between July 21 and Aug. 1, according to metals industry information provider SMM, among dozens of such facilities idled for maintenance amid weak domestic steel demand.
More mills are expected to follow suit in coming weeks, it said. Construction steel rebar on the Shanghai Futures Exchange rose 1.7%, while hot-rolled coil climbed 1.8%. Stainless steel gained 0.2%.
Other steelmaking ingredients traded higher, bucking iron ore’s volatility, with Dalian coking coal up 1.6% and coke gaining 1.8%.
Comments
Comments are closed for this article.