BEIJING: Iron ore futures declined on Thursday, tracking a weaker base and precious metals market as a stronger US dollar fuelled a broad risk-off appetite.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 1.09% lower at 906.5 yuan ($125.13) a metric ton.
The benchmark June iron ore on the Singapore Exchange was trading 1.77% lower at $119.45 a ton as of 0725 GMT. A stronger dollar following hawkish minutes from the US Federal Reserve that revealed a willingness to raise interest rates among some officials pressured prices of metals.
“Iron ore also felt some knock-on impact from other base and precious metals such as copper and silver as well as a falling stock market,” said Pei Hao, a Shanghai-based analyst at international brokerage Freight Investor Services (FIS).
Shanghai Copper lost more than 4% while silver slipped nearly 5%. However, declines were capped by the latest Chinese property stimulus, wherein several cities lowered down payment and mortgage loan interest rates to lift demand.
This comes after Beijing announced “historic” steps last Friday to stabilise its crisis-hit property sector. “There is still expectation of a further increase in hot metal output as mills still have some margins... but iron ore destocking at ports has not gone through smoothly,” analysts at Shengda Futures said in a note.
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