BEIJING: Iron ore futures fell on Tuesday, with the Dalian contract falling for the first session in seven, as investors reconsidered stimulus prospects from top consumer China after its first-quarter economic growth topped forecasts.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 1.49% lower at 826 yuan ($114.10) a metric ton. The benchmark May iron ore on the Singapore Exchange slid by 2.73% to $109.15 a ton, as of 0708 GMT, after three straight sessions of gains. China’s gross domestic product (GDP) grew 5.3% year-on-year in January-March, comfortably above analysts’ expectations of a 4.6% increase in a Reuters poll and slightly faster than the previous quarter’s 5.2% rise.
The market had hoped China would unveil more stimulus in the second quarter after a slew of disappointing data from the world’s second-largest economy.
But that hope dimmed after the better-than-expected GDP data, despite the still-sputtering property sector, analysts said. New home prices in China fell at their fastest pace in more than eight years in March as major property developers’ debt woes continued to drag on demand. Caution also mounted as some traders were wary of possible downside risks following a continuous and rapid increase in iron ore prices. As of Monday, prices of the key steelmaking ingredient had climbed by around 8% from last week. That said, ore demand is likely to be supported by expectations of a pick-up in crude steel output in April. China’s crude steel output fell 7.8% year-on-year in March as steelmakers cut production on weaker-than-expected demand and growing inventories, but the decline was somewhat less than forecast. Other steelmaking ingredients on the DCE were mixed, with coking coal up 1.6% while coke dropped 2.02%. Steel benchmarks on the Shanghai Futures Exchange were also mixed. Rebar and hot-rolled coil were little moved, while wire rod shed 0.32% and stainless steel lost 0.79%.
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