BEIJING: Iron ore futures prices hit a more than one-week low on Wednesday, with top consumer China’s persistently weak factory data hitting fragile investor sentiment amid renewed worries over the recovery of the country’s property sector.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 3.08% lower at 960.5 yuan ($133.74) a metric ton, its lowest since Jan. 23.
The benchmark March iron ore on the Singapore Exchange was 2.36% lower at $129.7 a ton, as of 0703 GMT, also its lowest since Jan. 23.
China’s manufacturing activity in January contracted for the fourth straight month, an official survey showed on Wednesday, suggesting the sector was struggling to regain momentum at the start of 2024.
The downward correction on ore prices came as the flurry of pre-holiday restocking for feedstocks among steel mills ended and both shipments and port inventories picked up, said Chu Xinli, a Shanghai-based analyst at China Futures.
“But a very steep fall might be unlikely due to improved demand amid the continued increase in hot metal output.” A liquidation order on property giant China Evergrande Group from a Hong Kong court on Monday dealt a fresh blow to the country’s fragile property market, pulling down prices of the key steelmaking ingredient and casting a shadow on the demand outlook.
“The process of carving up the world’s most indebted property developer will likely increase uncertainty in China’s real estate sector. This could delay the recovery the market had been expecting this year,” analysts at ANZ bank noted.
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