Prices of iron ore futures dropped on Monday on subdued steel consumption in top consumer China, while persistent weakness in the country’s real estate sector also dampened market sentiment.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) TIO1! ended daytime trade 2.21% lower at 706.5 yuan ($98.47) a metric ton.
Earlier in the session, the contract reached 704 yuan, its lowest since May 12.
The benchmark June iron ore (SZZFM5) on the Singapore Exchange traded 1.09% lower at $97.05 a ton as of 0708 GMT.
“Chinese prices for imported iron ore fell in both the spot and futures markets during May 19-23, with hot metal production at steelmakers slipping further amid the approaching low season for steel demand,” said consultancy Mysteel.
Hot metal output, typically used to gauge iron ore demand, eased 0.48% month-on-month to 2.4 million tons in May, although production remained at a high level, broker Everbright Futures said.
Continued challenges in construction and the real estate sector have had a significant drag on domestic steel demand, said broker Galaxy Futures.
Broadly, weakness in China’s property sector is expected to continue this year, with home prices projected to fall nearly 5% and remain flat in 2026, a Reuters poll showed.
Still, the U.S. dollar index DXY, which tracks the currency against six major rivals, sank 0.3% to 98.813, extending a 1.9% tumble from last week.
A weaker greenback makes dollar-denominated assets more affordable to holders of other currencies.
Other steelmaking ingredients on the DCE languished, with coking coal NYMEX:ACT1! and coke (DCJcv1) down 1.96% and 1.72%, respectively.
Steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar RBF1! dropped 1.67%, hot-rolled coil EHR1! fell 2.03%, stainless steel HRC1! eased 0.04% while wire rod (SWRcv1) plunged 2.58%.
Source: Reuters