SINGAPORE: Iron ore futures prices eased on Tuesday as persistent weakness in China’s property sector dampened investor sentiment, while declining crude steel output and weather-related disruptions further weighed on steel consumption.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.07% lower at 765.5 yuan ($106.75) a metric ton, as of 0250 GMT.
The benchmark August iron ore on the Singapore Exchange was 0.59% lower at $99 a ton.
In June, China’s new home prices saw their sharpest monthly decline in eight months, reflecting continued sluggishness in the property sector.
China’s crude steel output in June fell 3.9% from the previous month, and was down 9.2% year-on-year as more steelmakers carried out equipment maintenance.
In addition, high temperatures in the north and heavy rainfall in the east and south limited outdoor construction, lowering demand for steel products.
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“Strong steel production, healthy mill margins, and low steel inventories appear to have motivated mills to restock raw materials,” analysts from ANZ said in a note.
However, gains were limited by concerns that authorities will continue to curb steel capacity, ANZ added.
Still, China’s Q2 GDP grew 5.2% year-on-year, while June industrial output climbed 6.8% compared to the previous year, beating analyst expectations in the face of U.S. tariffs.
Elsewhere, shipments of iron ore from top producers Australia and Brazil were mixed, with Australia’s shipments declining due to maintenance at some ports, while Brazil’s shipments rebounded significantly, said broker Hexun Futures.
Other steelmaking ingredients on the DCE fell, with coking coal and coke down 0.16% and 0.59%, respectively.
Steel benchmarks on the Shanghai Futures Exchange all dropped. Rebar dipped 0.35%, hot-rolled coil lost 0.21%, wire rod fell 1.37% and stainless steel eased 0.04%.
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