Iron ore prices fell on Monday to their lowest in more than a year, as investors weighed prospects of soft China demand amid an uneven economic recovery and stronger supply against fresh monetary easing measures by the world’s top consumer.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 4.5% lower at 658.5 yuan a metric ton, marking its weakest level since Aug. 17, 2023.
The benchmark October iron ore on the Singapore Exchange was 2.31% lower at $81.55 a ton, as of 0701 GMT.
“The broader risk-off tone is being underpinned by a weak outlook for Chinese demand, as evidenced by weakness in new housing construction and a lack of offset from the infrastructure sector,” Westpac analysts said in a note.
Raw iron ore output in the January-August period climbed 4.1% year-on-year, Chinese financial information site Hexun Futures reported, citing National Bureau of Statistics data.
Meanwhile, stainless steel exports hit a record high in August, rising 33.4% year-on-year, Chinese consultancy Mysteel said.
The surge in exports, also up 18.9% from July, comes as manufacturers increasingly turn to the global market amid sluggish domestic demand this year, Mysteel said.
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China’s central bank supplied 14-day cash to its banking system and at a lower interest rate, signaling its intent for further monetary stimulus, though analysts said the funding operation in itself wasn’t a major policy easing.
The world’s second-largest economy is struggling to lift growth despite a series of policies aimed at spurring domestic spending. Speculation that Beijing will hasten easing grew last week after a super-sized rate cut by the US Federal Reserve.
($1 = 7.0495 Chinese yuan)
(Reporting by Gabrielle Ng; Editing by Subhranshu Sahu)
