BEIJING: Prices of iron ore futures extended losses on Monday to their lowest levels in more than two months, pulled down by signs of dull steel consumption in top consumer China and a stronger US dollar.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) closed daytime trade 3.11% lower at 795.5 yuan ($109.55) a metric ton, at its lowest since April 9.
The benchmark July iron ore on the Singapore Exchange fell 2.33% to $102.55 a ton, as the of 0724 GMT, the lowest since April 8. Many regions have been hit by high temperatures and heavy rains, resulting in temporary suspension of activities in some construction sites, analysts at Everbright Futures said, adding that steel demand remained subdued, dragging down iron ore prices.
“Iron ore bulls have been stubbornly holding out hope in vain for any further supportive measures, which might support China’s crumbling property sector as the last bastion of hope for any potential recovery in construction activity,” said Atilla Widnell, managing director at Navigate Commodities.
“Unfortunately, all roads and metrics are leading towards a heavy contraction in sector activity for 2024. Moreover, looming domestic property developer liquidations and winding up orders now present previously unfathomable headwinds for local construction steel consumption.”
A firmer US dollar weighed down broad commodities including iron ore and steel, said analysts, as a stronger greenback makes dollar-denominated commodities less attractive for holders of other currencies.
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