keywords :
Iron ore futures dropped on Monday, as the lack of substantial stimulus from China unnerved investors, while concerns over long-term steel demand continued to weigh on the market.
The most-traded January iron ore on China’s Dalian Commodity Exchange DCIOcv1 ended daytime trade 1.6% lower at 719.5 yuan ($100.03) per metric ton.
On the Singapore Exchange, the benchmark September iron ore SZZFU3 retreated 1% to $100.8 a metric ton, as of 0710 GMT, paring gains from the previous session.
China’s consumers and companies are tying up trillions of yuan in longer-dated deposits with banks, effectively taking a vast pool of money out of circulation and risking the kind of liquidity trap that hobbled Japan’s economy in the 1990s.
Support measures for China’s property sector failed to excite the iron ore market, ANZ analysts said in a note.
China’s Zhengzhou city last Friday launched measures to support its property market, the first of such moves by a big city heeding signals from policymakers and the latest in a series of policy measures in recent weeks to support the economy as its post-pandemic recovery falters.
Falling steel demand forecasts also dampened trader sentiment.
This month will likely see China’s prices for imported iron ore dragged down by weakened demand among steelmakers and by mounting ore supplies at ports, Mysteel forecasts in its latest monthly report.
Steel benchmarks on the Shanghai Futures Exchange fell overall. The most-active rebar contract SRBcv1 dipped 0.5%, hot-rolled coil SHHCcv1 slid 0.9%, wire rod SWRcv1 lost 0.5%, and stainless steel SHSScv1 was down 1.2%.
Steelmaking ingredients Dalian coking coal DJMcv1 climbed 1.1%, while coke DCJcv1 fell 0.2%.
Still, tighter iron ore supply last week helped alleviate some pressure on prices.
The total iron ore stocks at 45 major ports in China were at 122.9 million metric tons, or down 1.6 million metric tons for the week ended Aug. 3, Mysteel said in a port survey last Friday.