Dalian iron ore futures tumbled on Thursday to their lowest in more than two weeks, weighed down by a lack of fresh stimulus from a key policy briefing in top consumer China, while higher supplies from mining heavyweights also pressured the market.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 5.99% lower at 746.0 yuan ($104.74) a metric ton, hitting its weakest level since Sept. 30.
The benchmark November iron ore on the Singapore Exchange slid 5% to $99.5 a ton by 0705 GMT.
Expectations of “bazooka-style” fiscal stimulus were crushed after China’s finance ministry failed to expand beyond existing credit support for property developers completing unfinished “whitelisted” construction projects, said Cameron Law, commodities analyst at Navigate Commodities.
“We remain highly sceptical of the net positive contributions these measures will have on Chinese steel and underlying iron ore consumption in the medium term, given that new construction projects, which are the primary driver of steel demand, will continue to be held back on a tight leash,” said Law.
China said it would expand a “white list” of housing projects eligible for financing and increase bank lending for such developments to 4 trillion yuan ($562 billion).
Analysts said the housing policy briefing announced few incremental policies on boosting home demand.
Meanwhile, prospects of firmer global supply also weighed on the iron ore market.
BHP BHP.AX, the world’s largest listed miner, beat first-quarter iron ore output estimates, while Brazilian miner Vale SA reported its highest quarterly iron ore production since 2018.
Other steelmaking ingredients on the DCE plunged, with coking coal DJMcv1 and coke DCJcv1 down 8% and 7.74%, respectively.
Steel benchmarks on the Shanghai Futures Exchange posted losses. Rebar SRBcv1 slid about 5%, hot-rolled coil plummeted 4.87%, wire rod SWRcv1 tumbled around 4.4% and stainless steel SHSScv1 lost 1.75%.
Source: Reuters
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