BEIJING: Dalian and Singapore iron ore futures struggled for momentum in early trade on Wednesday as traders assessed how far top steel producer China might go in providing support for its faltering economic recovery.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange was up 0.3% at 807.50 yuan ($112.28) per metric tonne, as of 0215 GMT. On the Singapore Exchange, the steelmaking ingredient’s benchmark July contract shed 0.2% to $112.80 per metric tonne. Both Dalian and Singapore benchmarks retreated on Tuesday from a more than two-month high, as modest cuts in China’s loan prime rates disappointed traders hoping for broader support, particularly for the weak property sector.
China’s five-year loan prime rate, which serves as mortgage reference rate, was cut by just 10 basis points.
“This lower-than-expected cut, combined with no firm announcements of a sizeable stimulus package after last Friday’s State Council meeting, despite much media hype, has left many wondering how willing China is to stimulate its economy,” said National Australia Bank head of market economics Tapas Strickland.
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