SHANGHAI: 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 the property sector in top consumer China.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 2.23% lower at 941 yuan ($131.07) a metric ton, marking its lowest level since Jan 19 It has fallen more than 5% this week.
Meanwhile, the benchmark March iron ore 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. “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 resurfaced in 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 and coke down 0.61% and 0.81%, respectively. Steel benchmarks on the Shanghai Futures Exchange recorded additional declines.
Rebar lost 1.19%, hot-rolled coil slipped 0.95%, wire rod shed 1.78% and stainless steel fell 0.91%. The weakness in the ferrous market persisted despite a series of stimulus measures to support China’s troubled property sector.
Its central 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.
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