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Iron ore futures fell amid profit-taking on Monday, with the Singapore benchmark retreating after eight straight sessions of gains and Dalian prices easing from a 10-week high.
Cautious traders braced for a raft of Chinese data for May to be released this week, such as industrial production, retail sales, bank lending and house prices, and for the People’s Bank of China’s (PBOC) decision on the medium-term lending facility rate.
The steelmaking ingredient’s most-active July contract on the Singapore Exchange was down 4.8% at $107.20 per metric ton, as of 0700 GMT.
The most-traded September iron ore on China’s Dalian Commodity Exchange ended daytime trading 1.8% lower at 785.50 yuan ($109.96) a tonne.
Hopes of a broader, more substantial stimulus to support top steel producer China’s faltering economy had fuelled iron ore’s rally starting late May.
While traders continued to speculate about stimulus prospects in China, including additional support for the country’s struggling property sector, analysts said market fundamentals have not really changed much.
“There’s little to suggest that Chinese construction and/or manufacturing activity will expand robustly any time soon given that it will take time for micro-targeted stimuli to reap the desired outcomes,” Navigate Commodities managing director Atilla Widnell said.
Iron ore, however, may remain supported as attention turns to the PBOC’s Medium-Term Lending Facility rate decision on Thursday, “with stubborn traders likely punting on a rate cut from 2.75%”, Widnell said.
China’s property sector is expected to grapple with “persistent weakness” for years, and its problems would continue to drag on the country’s economic growth, Goldman Sachs analysts said.
Rebar on the Shanghai Futures Exchange SRBcv1 fell 1.1%, hot-rolled coil SHHCcv1 dropped 0.8%, while wire rod SWRcv1 gained 1.3% and stainless steel SHSScv1 rose 0.9%.
Coking coal DJMcv1 and coke DCJcv1 on the Dalian exchange shed 0.2% and 1.7%, respectively.