SINGAPORE: Iron ore futures fell to their lowest level in over three months on Tuesday, weighed down by mounting concerns over the demand outlook in top consumer China despite its latest move to revive its property market.
China lowered the five-year loan prime rate ( by 25 basis points (bps) to 3.95%, compared to a forecast of a cut of five to 15 bps.
However, this was not enough to counter the persistent weakness in the ferrous market.
The most-traded May iron ore on China’s Dalian Commodity Exchange ended daytime trade 5.41% down at 909.5 yuan ($126.35) per metric ton, the lowest since Nov. 1.
The benchmark March iron ore on the Singapore Exchange tumbled 4.39% to $121.8 a ton as of 0722 GMT, the lowest since Nov. 8. China left a key policy rate unchanged on Sunday when rolling over maturing medium-term loans, with uncertainties around the timing of an easing by the Federal Reserve limiting Beijing’s room to manoeuvre on monetary policy.
“The PBoC opted to keep interest rates on its one-year policy loans unchanged, raising concerns about demand in the near term... new construction looks weak, with new homes sales down 34% y/y in January,” ANZ Bank analysts said.
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