Iron ore futures edged lower on Monday as Beijing’s policy rate cuts failed to lift market sentiment.
China’s central bank lowered benchmark interest rates on Monday in an effort to boost economic growth. The one-year Loan Prime Rate (LPR), which constitutes the benchmark for the most advantageous rates that banks can offer to businesses and households, was cut from 3.45 pct to 3.35 pct. The five-year rate, the benchmark for mortgage loans, was lowered from 3.95 pct to 3.85 pct.
However, the rate cuts failed to fully eradicate concerns as market fundamentals remained weak. Higher iron ore inventory at major Chinese ports and weak downstream steel demand continued to dampen the iron ore outlook.
Reflecting subdued steel demand in the country, major Chinese producer Shagang decreased its long steel prices by 100 yuan (USD 14) per ton for sales over July 21-31.
On the Dalian Commodity Exchange, iron ore futures for September delivery decreased by 0.31 pct to 798.5 yuan (USD 109.8) per ton. Dalian coke and coking coal futures fell by 2.53 pct and 2.9 pct to 2,138.5 yuan (USD 294) and 1,507 yuan (USD 207) per ton, respectively.
On the Shanghai Futures Exchange, rebar futures decreased by 0.66 pct to 3,451 yuan (USD 474) per ton. HRC futures declined by 0.74 pct to 3,634 yuan (USD 500) per ton. Wire rod futures fell by 0.72 pct to 3,576 yuan (USD 492) per ton. Stainless steel futures increased by 0.65 pct to 13,850 yuan (USD 1,905) per ton.
1 USD / 7.27 yuan
| Material | Closing Price (in yuan) |
Difference from Night Session (pct) |
Difference from Previous Morning Session (pct) |
| Wire Rod | 3,576 |
-0.72 |
-0.53 |
| HRC | 3,634 |
-0.74 |
-0.85 |
| Rebar | 3,451 |
-0.66 |
-0.81 |
| Stainless Steel | 13,850 |
0.65 |
0.25 |
| Iron Ore | 798.5 |
-0.31 |
-0.75 |
| Coke | 2,138.5 |
-2.53 |
-2.03 |
| Coking Coal | 1,507 |
-2.90 |
-2.42 |
