BEIJING: Iron ore futures extended losses on Monday, as some investors unwound long positions amid persistently weak data and fading hopes for more stimulus in top consumer China.
The most-traded May iron ore on China’s Dalian Commodity Exchange (DCE) recouped some of its earlier losses before closing daytime trading 1.59% lower at 928 yuan ($130.15) a metric ton, its lowest since Dec. 7. Earlier in the day, it hit its weakest level since Nov. 8 at 915 yuan.
The benchmark January iron ore on the Singapore Exchange dropped 0.81% to $132.8 a ton, its lowest since Dec. 13, as of 0705 GMT. China’s new home prices fell for the fifth straight month in November, official data showed on Friday, while January-November property investment fell 9.4% year-on-year, after a 9.3% drop in January-October.
“Both top decision-making meetings did not stimulate a large-scale economic stimulus or any policies in the property market that beat expectations, so the ferrous market has shifted back to fundamentals,” analysts at Sinosteel Futures said in a note.
Some analysts, however, saw limited room for further price decline, citing low inventories and the need for replenishment for raw materials among mills to sustain production over the Lunar New Year holiday break in February.
“Ore inventories among mills still hovered at a relatively low level (despite some increase), and it means that steelmakers will have to stockpile cargoes in the coming weeks, which will somehow support prices,” analysts at Huatai Future said in a note.
Other steelmaking ingredients also posted losses, with coking coal and coke on the DCE down 1.69% and 1.54%, respectively. Steel benchmarks on the Shanghai Futures Exchange were mixed after cold waves slowed construction activities, weighing on demand.
Rebar was little changed, hot-rolled coil slid 0.57%, wire rod added 0.84% and stainless steel advanced 0.62%.
Temperatures in parts of China hit their lowest levels since records began, state broadcaster said on Sunday, as a cold snap gripped large swathes of the country.
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