MANILA: Iron ore futures slumped on Tuesday, with the Dalian benchmark contract hitting a seven-week low, while prices in Singapore sank below $89 a tonne as a peak season in China for construction-led steel demand draws to an end with a disappointing outcome.
The most-traded January iron ore on China’s Dalian Commodity Exchange ended morning trade 1.5% lower at 672.50 yuan ($92.10) a tonne, after touching its weakest since Sept. 2 at 662.50 yuan. On the Singapore Exchange, the steelmaking ingredient’s benchmark November contract dropped as much as 2.7% to $88.20 a tonne, its lowest since November. “The peak season is coming to an end.
The previously expected demand recovery did not meet expectations, let alone exceed expectations,” Huatai Futures analysts said in a note.
Steel demand in top producer China, particularly from the construction sector, usually picks up in September and October.
“The market’s confidence in steel prices has weakened,” Huatai analysts said, with overall sentiment likely to remain depressed as a global recession looms, dampening demand for commodities.
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