Latest News

The weekly iron ore loss is a sign that China's stimulus has faded

The price of iron ore futures was little changed on the Friday, but they were headed for a loss for the week as the expectations for more stimulus by China, the top consumer, for its struggling property sector, faded. This dimmed demand prospects for this steelmaking ingredient.

As of 1400 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was unchanged, trading at 784 Yuan per metric ton. This is down 2% for this week.

As of 1300 GMT, the benchmark September iron ore traded on Singapore Exchange rose 0.64% to reach $100.4 per ton. The price has fallen 2.8% this week.

The much-anticipated China's Politburo July meeting, which sets the economic direction for the remainder of the year, failed to provide stimulus for the beleaguered property sector. This remains a drag on the consumption of industrial material such as steel.

Analyst Zhuo Guqiu at Jinrui Futures said that the meeting set a positive tone in the current economic climate, reducing the urgency to implement more stimulus policies.

China's purchasing manager's index (PMI), which fell to 49.3 at the end of July, a level not seen since April, missed a median poll forecast of 49.7 and was down from 49.7 at the end June. This reflects a weakening in demand both at home and abroad.

Zhuo, of Jinrui Futures, said that falling demand is also weighing on the prices of key steelmaking ingredients.

The average daily hot metal production fell by 0.6% compared to the previous week, reaching 2.41 million tonnes in the week ending July 31. This was the lowest level for three weeks.

Iron ore demand is usually gauged by the hot metal production.

Coking coal and coke, which are both steelmaking ingredients, were down by 4.72% each and 0.18% respectively.

The benchmark steel prices on the Shanghai Futures Exchange are mixed. Rebar fell by 0.68%. Hot-rolled coil, wire rod and hot-rolled sheet were unchanged. Stainless steel gained 0.43%. (Reporting and editing by Eileen Soreng; Amy Lv, Lewis Jackson)

(source: Reuters)