Dalian iron ore futures continued their downward trend on Tuesday despite the Chinese central bank’s reduction in a key lending benchmark rates, failing to provide a boost to the futures market.
The People’s Bank of China (PBOC) lowered the one-year loan prime rate (LPR) by 10 basis points to 3.55pct, and the five-year LPR was also cut by the same margin to 4.20pct. However, analysts have noted that these rate cuts are too small to have a significant impact on monetary conditions.
Most corporate loans in China are based on the PBOC’s one-year loan prime rate, while mortgages are pegged to the five-year rate.
Investor enthusiasm, which drove the futures market rally last week, is diminishing as Beijing’s economic measures fall short of expectations.
At the Dalian Commodity Exchange, the September contract for iron ore concluded daytime trading with a 0.92pct decrease, settling at 806.5 yuan (USD 112.7) per ton. Coke and coking coal futures also experienced declines of 1.49pct and 2.72pct respectively, reaching 2,143 yuan (USD 299) per ton and 1,357.5 yuan (USD 190) per ton.
Meanwhile, at the Shanghai Futures Exchange, rebar futures decreased by 0.87pct to 3,743 yuan (USD 523) per ton, and HRC futures dropped by 0.93pct to 3,836 yuan (USD 536) per ton. Wire rod futures saw a decrease of 0.96pct, reaching 4,219 yuan (USD 589.5) per ton, while stainless steel futures recorded a 1.83pct decline, settling at 14,785 yuan (USD 2,066) per ton.
1 USD / 7.15 yuan
