SINGAPORE: Prices of iron ore futures edged lower on Monday as investors and traders assessed mixed market signals from top consumer China following the end of its widely watched third plenum.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 0.31% lower at 798.5 yuan ($109.79) a metric ton.
The benchmark August iron ore contract on the Singapore Exchange fell 0.83% to $103.65 a ton, as of 0710 GMT. China lowered a key short-term policy rate and its benchmark lending rates in an attempt to boost growth, as the country is verging on deflation and faces a prolonged property crisis, surging debt and weak consumer and business sentiment.
The cuts come after China last week reported weaker-than-expected second-quarter economic data and its top leaders met for their third plenum. The boost, however, failed to fully eradicate concerns after the long-awaited Chinese policy update presented no major shift. “The Third Plenum brought together China’s leaders to map out the general direction of the country’s long-term social and economic policies. But little was done to rectify weak economic growth,” ANZ analysts said in a note.
Weighing on the key steelmaking ingredient was also the fact that major “producers are overcoming recent supply-side issues to boost exports,” ANZ analysts said. Depressed demand from end-users and negative sentiment pervaded the domestic steel market from July 15-19, said Chinese consultancy Mysteel.
Additionally, US President Joe Biden decided to end his reelection campaign on Sunday, which investors said creates uncertainty and could roil global markets.
Other steelmaking ingredients on the DCE retreated further, with coking coal and coke down 2.9% and 2.53%, respectively.
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