Iron ore slides on disappointing China data, dim near-term demand outlook

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Iron ore futures prices slid on Monday after a batch of economic data in top consumer China undershot expectations and as floods and high temperatures in the country cast a shadow over the near-term demand outlook.

The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 1.63% lower at 813 yuan ($112.05) a metric ton.The benchmark July iron ore SZZFN4 on the Singapore Exchange slipped 2.51% to $104.8 a ton, as of 0710 GMT.A raft of weaker-than-expected data for the property sector, which is the largest steel consumer in China, weighed on market sentiment, even as policymakers doubled down on efforts to support the ailing sector and shore up consumer confidence.Property investment in China fell 10.1% in the first five months of 2024 from a year earlier, after dropping 9.8% in January-April, statistics bureau data showed. China’s new home prices fell at the fastest pace in more than 9-1/2 years in May.This came after new bank lending in China rebounded far less than expected in May and some key money gauges hit record lows, suggesting the world’s second-largest economy is still struggling to regain its footing.Floods in the southern regions and high temperatures also stifled demand for steel products.Other steelmaking ingredients on the DCE also retreated, with coking coal DJMcv1 and coke DCJcv1 down 0.97% and 1.13%, respectively.Steel benchmarks on the Shanghai Futures Exchange were weaker. Rebar SRBcv1 dipped 0.74%, hot-rolled coil SHHCcv1 fell 0.63%, wire rod SWRcv1 shed 1.24% and stainless steel SHSScv1 dropped 0.61%.Separately, China’s crude steel output in May climbed 8.1% from the previous month and was up 2.7% from the year before, data showed, thanks to improved domestic demand and robust exports.Source: Reuters