Iron ore futures on the Dalian and Singapore exchanges fell to their lowest levels in more than a week on Tuesday, extending losses after last week’s rally as pessimism increased on the demand outlook in China, the biggest global steel producer.
Benchmark steel ingredient prices are down more than 20% from this year’s peak, just above the $130 per tonne mark reached in mid-March, when sentiment was positive as China entered its picking season. peak of construction in the spring and after the lifting of the strict Covid-19 restrictions.
With the construction season drawing to a close and steel demand not meeting expectations, while the domestic economy is performing erratically due to a sluggish housing sector, analysts say iron ore consumption in China may remain weak.
The benchmark June iron ore contract on Singapore Stock Exchange fell 2.5% to $99.55 a ton, hitting an intraday low of $99.30, the weakest level since May 12.
September’s top-traded iron ore on China’s Dalian Commodity Exchange finished daytime trading 3% lower at 707 yuan ($102.28) per ton after hitting 704 yuan, its lowest since May 15.
Iron ore retreated after last week’s rally on hopes that China will implement additional measures to support its economy.
“However, given the lack of significant changes in monetary and fiscal policy, China’s business cycle is expected to bottom out in the third quarter,” said Mysteel, an industry consultancy and data provider, in its weekly forecast.
Mysteel says the decline in real estate investment and new construction activity in China in January-April signaled continued weakness in steel demand.
Source: Terra
Rose James is a Gossipify movie and series reviewer known for her in-depth analysis and unique perspective on the latest releases. With a background in film studies, she provides engaging and informative reviews, and keeps readers up to date with industry trends and emerging talents.
