BEIJING: Iron ore futures prices held their ground on Monday, as weaker-than-expected credit data in top consumer China partially eclipsed support from the prospect of more bond issuance by the country’s authorities to spur economic growth.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) was up 0.23% at 869 yuan ($120.13) a metric ton, as of 0241 GMT.
The benchmark June iron ore on the Singapore Exchange was trading 0.22% lower at $115.55 a ton.
Chinese banks extended 730 billion yuan in new yuan loans in April, down sharply from 3.09 trillion yuan in March and falling short of analysts’ expectations, data from its central bank on Saturday.
China plans to begin raising funds through the issuance of long-term bonds this week, with the bulk of the one trillion yuan bonds having tenors beyond 30 years, sources with direct knowledge of the plans told Reuters on Monday.
Both benchmarks recouped some losses earlier in the session following the news of further bond issuance by China.
Mixed fundamental signals also triggered caution among investors.
Strength in hot metal output reflected growing demand for the key steelmaking ingredient amid persistent production resumption among mills, while the absolute portside ore inventories still hovered at relatively high levels, weighing on ore prices, said analysts at Huatai Futures in a note.
Other steelmaking ingredients on the DCE lost ground, with coking coal and coke down 1.48% and 1.52%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were largely listless. Rebar, hot-rolled coil and stainless steel were flat, while wire rod fell 1.31%.
The state-backed Chinese steel association called on steelmakers to cut back record high inventories on Friday as the sector struggles with oversupply.
“The downstream demand has not exhibited large-scale recovery and it will enter into a season with lacklustre demand soon; hot metal output will touch the ceiling,” said analysts at Galaxy Futures said in a note.