SINGAPORE: Dalian iron ore futures logged their sharpest daily drop in almost two years on Tuesday, as bleak economic data from top consumer China clouded the demand outlook, while firm global supply also weighed on prices.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 4.74% lower at 703.5 yuan ($98.87) a metric ton, posting its steepest decline since Oct. 31, 2022.
The contract fell as much to 700.0 yuan earlier in the session, its lowest level since Aug. 19.
The benchmark October iron ore on the Singapore Exchange was 2.75% lower at $94.15 a ton, as of 0711 GMT.
Iron ore futures fell following further evidence of weak Chinese demand, as the ongoing contraction in factory activity was joined by a deepening slump in the property sector, ANZ analysts said in a note.
China’s manufacturing activity sank to a six-month low in August, an official survey showed, pressuring policymakers to press on with plans to direct more stimulus to households.
Meanwhile, the country’s new home prices rose at a slower pace in August, as its crisis-hit property sector struggles to find its bottom after a batch of supportive policies.
The total volume of iron ore shipments dispatched to global destinations from 19 ports and 16 mining companies in Australia and Brazil jumped 10.9% week-on-week to reach 29 million tons during Aug. 26-Sept. 1, Chinese consultancy Mysteel said.
The spike was due to a surge in shipping volumes of Brazilian iron ore, which leapt 39% from the previous week to mark its highest weekly shipment since 2019, Mysteel added.
Other steelmaking ingredients on the DCE extended losses, with coking coal and coke down 2.41% and 2.24%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange were weaker. Rebar slid 3.14%, hot-rolled coil dropped almost 3.0%, stainless steel lost nearly 1.0%, while wire rod was flat.
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