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Dalian iron ore extends pullback, hits 1-week low
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SGX benchmark June iron ore see-saws below $100/T
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Slew of downbeat China data weigh on sentiment
(Recasts, updates price changes throughout)
By Enrico Dela Cruz
May 12 (Reuters) - Iron ore futures fell on Friday, as
traders worried about a dim demand outlook in top steel producer
and metals consumer China assessed the prospects of additional
stimulus for the world's second-biggest economy.
The most-traded September iron ore on China's Dalian
Commodity Exchange ended daytime trading 2% lower at
697 yuan ($100.84) a tonne, off a session low of 685.50 yuan,
its weakest since May 5.
Dalian iron ore's benchmark price, however, was on track for
a modest weekly gain after clawing back some lost ground.
On the Singapore Exchange, the steelmaking ingredient's
benchmark June contract was up 0.3% at $98.85 a tonne,
as of 0709 GMT, after earlier hitting $96.90, its lowest since
May 5.
SGX iron ore has slumped more than 20% since hitting this
year's peak at about $131 a tonne in mid-March, as the euphoria
over China's lifting of COVID-19 restrictions and policy support
for the struggling property sector had abated.
The current macroeconomic backdrop has turned out
uninspiring.
Data on Thursday showed new Chinese bank loans tumbled far
more sharply than expected in April, among a slew of downbeat
indicators spurring concerns that the economy's recovery is
losing steam and putting pressure on policymakers to roll out
additional supportive measures.
Many Chinese steel mills have reportedly lowered their
prices amid disappointment over steel demand during the
country's peak spring construction season.
"With the peak construction season coming to an end and with
the expected demand recovery not meeting expectations, there is
little upside for steel output and iron ore demand recovery in
the short to medium term," said ING commodities strategist Ewa
Manthey.
Rebar on the Shanghai Futures Exchange shed 1.5%,
hot-rolled coil lost 1.6%, stainless steel dropped 0.7%, while wire rod climbed 0.8%.
Coking coal and coke on the Dalian
exchange gained 0.3% and 0.5%, respectively.
(Reporting by Enrico Dela Cruz in Manila; Editing by Rashmi Aich)
