Iron ore futures fell on Monday following solid gains in the previous week, as negative news related to China’s real estate sector prompted caution.
The benchmark contract for the October steel component on the Singapore Exchange fell 0.9% to $121.90 a tonne. Earlier, the contract hit $119.60, down sharply from Friday’s six-month high of $123.75.
January’s most traded iron ore on the Dalian Commodity Exchange ended daily trading with a loss of 0.2% at 871.50 yuan ($119.53) per ton.
Chinese property developer Country Garden faces yet another liquidity test due Monday to pay $15 million in interest tied to an offshore bond, after twice avoiding last-minute default earlier this month. month.
Another troubled property developer, China Evergrande Group, saw its shares fall 25% after police arrested some employees of its asset management unit, suggesting a new investigation could worsen its problems.
State-backed Chinese developer Sino-Ocean Group Holding, meanwhile, said on Friday it would suspend payments on all offshore debt until a restructuring is implemented.
As the debt crisis plaguing Chinese developers worsens, data on Friday showed a decline in investment in the real estate sector.
“Everything about the real estate sector remains problematic,” economists at ING said in a note, while a survey of Chinese and international investors conducted by JPMorgan shows that the worst of the Chinese real estate crisis is not yet over.
Ignoring weakness in iron ore futures, other steel inputs rose, driven by signs of strong demand. Metallurgical coal and coke on the Dalian Stock Exchange gained 4.3% and 2.3%, respectively.
However, steel benchmarks in Shanghai have been mixed. Rebar gained 0.7%, hot rolled coils 0.3%, while wire rod fell 0.5%. Stainless steel rose 0.4%.
Source: Terra
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