MANILA: Dalian and Singapore iron ore futures fell on Monday amid a flurry of disappointing economic indicators and heat waves in China, while a surprise interest rate cut by the country’s central bank tempered traders’ pessimism.
The most-traded iron ore contract, for delivery in January next year, on China’s Dalian Commodity Exchange ended morning trade 1.8% lower at 715.50 yuan ($105.86) a tonne. On the Singapore Exchange, the steelmaking ingredient’s front-month September contract shed 1.9% to $108.30 a tonne.
Top steel producer China’s economy unexpectedly slowed in July, with industrial output to retail sales missing forecasts by large margins, pointing to a shaky recovery as Beijing shows no sign of easing its zero-COVID policy.
The gloomy data also reflected the impact of a crisis engulfing China’s property developers, with crude steel output in July 6.4% lower compared with a year earlier, and property investment in January-July falling at the fastest pace since March 2020. New home prices in July were also uninspiring.
Also pointing to a fragile economic recovery, data on Friday showed new bank lending in China tumbled more than expected in July, while broad credit growth slowed. And the chances of a rebound in activity this month appeared slim with the extreme heat being felt in several regions.
The “dangerously and historically high temperatures...will wreak havoc with economic activity,” said Navigate Commodities Managing Director Atilla Widnell.
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