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

The iron ore futures price was little changed Friday, but set to lose weekly value as the expectations for more stimulus from China, the top consumer, for its struggling property sector, faded. This dimmed demand prospects for this steelmaking component.

The September contract for iron ore on China's Dalian Commodity Exchange closed the daytime trading 0.19% lower, at 783 Yuan ($108.60), a metric tonne. This marked a fall of 2.1% in a week.

By 0700 GMT, the benchmark September iron ore traded on Singapore Exchange had risen 0.49% to reach $100.25 per ton. The price has fallen 2.9% this week.

The Chinese Politburo's meeting in July, which sets the course of the economy for the rest of the year, did not provide any stimulus to the property sector. This is a major obstacle for industrial materials like steel.

Analyst Zhuo Guqiu at Jinrui Futures said that the meeting had set a positive tone in the economy, and therefore, it was less urgent to implement more stimulus policies.

China's purchasing manager's index (PMI), which fell to its lowest level since April last year, also raised concerns about demand.

In July, it was 49.3, missing the median forecast of 49.7, according to a survey, and down from 49.7, in June. This shows a weakening in demand both at home and abroad.

Zhuo, of Jinrui Futures, said that falling demand was also a factor in affecting prices for the main steelmaking ingredient.

The average daily hot metal production fell by 0.6% compared to the previous week and reached 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 8.88% and 3.3% respectively.

The Shanghai Futures Exchange has seen a decline in most steel benchmarks. Rebar fell 1.2%, hot-rolled coil and wire rod dropped 0.6% while stainless steel remained unchanged. ($1 = 7.2110 Chinese Yuan) (Reporting and editing by Eileen Soreng, Subhranshu S Ahu and Lewis Jackson)

(source: Reuters)