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BEIJING: Iron ore futures lost stream on Wednesday for a fifth consecutive session, with the Singapore benchmark at the lowest level in nearly three weeks, as the demand outlook was clouded by a weakening steel market and a lack of fresh stimulus in top consumer China.

The benchmark February iron ore on the Singapore Exchange was 1.97% lower at $135.05 a metric ton, as of 0319 GMT, hitting the lowest since Dec. 21, 2023. The most-traded May iron ore on China’s Dalian Commodity Exchange (DCE) closed morning trading 1.56% lower at 976.5 yuan ($136.13) a ton, the lowest since Jan. 2.

Pressuring the upstream ore market is a widening loss among steel mills as well as a lack of confidence amid a period when policymakers typically will not announce more stimulus-related policies. “Weighing on the market are negative signs that steel products are piling up amid a seasonally sluggish season, steelmakers are suffering losses and there is no new fresh stimulus,” said Zhuo Guiqiu, a Shenzhen-based analyst at Jinrui Futures.

A drastic and significant price drop, however, is unlikely in the near term as there is no dramatic change in fundamentals, said Chu Xinli, a Shanghai-based analyst at China Futures. “It’s more likely prices will move within a relatively tight range until a clear direction shows up,” Chu added.

Other steelmaking ingredients also extended weakness, with coking coal and coke on the DCE down 1.51% and 1.66%, respectively. Steel benchmarks on the Shanghai Futures Exchange broadly dipped further. Rebar lost 0.84%, hot-rolled coil also shed 0.84%, wire rod declined 1.88%, while stainless steel added 0.37%.

The pessimism due to disappointing performance in the stock market in the world’s second-largest economy also permeated into the commodities markets, weighing down the corresponding prices, said analysts.

Market sentiment remained subdued although China’s blue-chip index slightly rebounded on Tuesday after hitting a nearly five-year low a day before.

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