Iron ore futures prices extended losses on Friday to their lowest level in two weeks and were set for a weekly fall as concerns persisted over the recovery of theproperty sector in top consumer China.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trade 2.23%lower at 941 yuan ($131.07) a metric ton, marking its lowest levelsince Jan. 19. It has fallen more than 5% this week.
Meanwhile, the benchmark March iron ore SZZFH4 on the Singapore Exchange was down 3.24% at$126.75 a ton, as of 0701 GMT, logging its lowest level since Jan. 18. It has declined over 6% so far this week.
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“China’s property sector woes continue to linger… the outlook for domestic steel demand from this sector remains bleak, with demand from social housing and renewable energy only partly offsetting it,” analysts at ANZ bank said.
“Moreover, pressure is mounting on China’s steel industry to reduce emissions. Renewed output curbs will be a new headwind for iron ore demand.”
Concerns over demand prospects resurfacedin the wake of a Hong Kong court ordering the liquidation of debt-saddled property giant China Evergrande Group.
Fitch Ratings said Evergrande’s liquidation could have wider effects on investment and property.
Other steelmaking ingredients on the DCE also eased, with coking coal DJMcv1 and coke DCJcv1 down 0.61%and 0.81%,respectively.
Steel benchmarks on the Shanghai Futures Exchange recorded additional declines. Rebar SRBcv1 lost 1.19%, hot-rolled coil SHHCcv1 slipped 0.95%, wire rod SWRcv1 shed 1.78% and stainless steel SHSScv1 fell 0.91%.
The weakness in the ferrous market persisted despite a series of stimulus measures to support China’s troubledproperty sector.
Itscentral bank issued 150 billion yuan in loans to policy banks through its pledged supplementary lending (PSL) facility in January, granting such loans for a second month as part of a push to support its “urban village” plan.
Source: Reuters (Reporting by Zsastee Ia Villanueva and Amy Lv; Editing by Dhanya Ann Thoppil and Sonia Cheema)