Dalian iron ore futures fell to their lowest level in more than two weeks on Thursday, pressured by a lack of fresh stimulus in major consumer China, while also increasing supply from major companies mining has weighed on the market.
The most-traded January iron ore contract on the Dalian Commodity Exchange closed 5.99% lower at 746.0 yuan ($104.74) per tonne, hitting its weakest level since March 30.
Benchmark iron ore for November fell 5% on the Singapore Stock Exchange to $99.50 a tonne.
Expectations for fiscal stimulus in China were dashed after the Ministry of Finance failed to expand beyond existing credit support to real estate developers completing unfinished construction projects, said Cameron Law, commodities analyst at Navigate Commodities.
“We remain very skeptical about the net positive contribution these measures will have on Chinese steel and iron ore consumption in the medium term, as new construction projects, which are the main driver of steel demand, will continue to be kept on a leash ,” Law said.
China said it will expand the list of housing projects eligible for financing and increase bank lending for such projects to 4 trillion yuan ($562 billion).
Analysts said the housing policy interview announced few incremental policies to boost housing demand.
Meanwhile, prospects of firmer global supply also weighed on the iron ore market.
BHP, the world’s largest publicly traded miner, topped first-quarter iron ore production estimates, while Vale reported its highest quarterly iron ore production since 2018.
Source: Terra
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