Dalian iron ore futures fell for the fifth straight session on Thursday to hit their lowest in more than a year, as a batch of weak Chinese economic data darkened prospects of demand from the world’s top consumer of the steel ingredient.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trade 2.58% lower at 678.5 yuan ($95.58) a metric ton. Earlier in the day, it hit its weakest level since Aug. 21, 2023 at 673.0 yuan.
The benchmark October iron ore SZZFV4 on the Singapore Exchange was 1.87% lower at $90.8 a ton, as of 0710 GMT.
“In contrast to last week’s mild rebound, iron ore futures in China started this week with a drastic fall, as worries about the health of China’s economy once again prevailed after new macroeconomic data pointed to weakening manufacturing activity,” Chinese consultancy Mysteel said in a note.
Expansion in China’s services sector activity slowed last month, a survey showed on Wednesday. Another survey had showed manufacturing activity slumped to a six-month low in August.
Strong supply and demand initially caused by a resumption of production at steel mills in August turned weak due to a decline in profits, Chinese financial information site Hexun Futures said in a note.
Steel mills in Tangshan and Jiangsu suffered losses of 61 to 178 yuan per ton in rebar and hot-rolled coil production last month, consultancy Steelhome said.
Real estate steel demand is expected to remain weak this month as inventory pressure of commercial housing is relatively high and property companies are more cautious about developing new projects, said Steelhome.
Other steelmaking ingredients on the DCE extended losses, with coking coal DJMcv1 and coke DCJcv1 down 3.7% and 3.41%, respectively.
Most benchmarks on the Shanghai Futures Exchange were weaker. Hot-rolled coil SHHCcv1 lost 2.16%, rebar SRBcv1 shed about 1.4%, stainless steel SHSScv1 ticked 0.04% lower, and wire rod SWRcv1 was flat.
Source: Reuters