Iron ore futures dip as weak economic data weighs on demand outlook

Iron ore futures fell on Monday, pressured by disappointing Chinese economic indicators that reinforced bearish demand expectations.

China’s property sector, once the country’s largest steel consumer, remains a major drag on growth. New home prices in September declined at the fastest pace in nearly a year, while home sales by value dropped 7.6pct in the first nine months, steeper than the 7.0pct fall recorded in January-August, according to the National Bureau of Statistics (NBS). Property investment fell 13.9pct in the same period, worsening from a 12.9pct decline earlier, and new construction starts contracted 18.3pct, compared with a 19.5pct slump in the first eight months.

Additionally, sluggish finished steel demand, evidenced by rising inventories at major warehouses, along with renewed U.S.-China trade tensions, has added further pressure and darkened the outlook for iron ore consumption

Markets are now closely watching the Communist Party Central Committee’s session, running through October 23, for potential measures to support economic growth as part of the new five-year plan.

On the Dalian Commodity Exchange, the most-traded January iron ore contract slipped 0.58pct to 767 yuan (USD 107.7) per ton. By contrast, coking coal futures rose 2.66pct to 1,216 yuan (USD 171), while coke gained 1.63pct to 1,710 yuan (USD 240) a ton.

On the Shanghai Futures Exchange, rebar and HRC futures inched lower to 3,045 yuan (USD 428) per ton and 3,215 yuan (USD 451) a ton, respectively. Wire rod declined 0.53pct to 3,347 yuan (USD 470), while stainless steel eased 0.16pct to 12,595 yuan (USD 1,769) per ton.

1 USD / 7.12 yuan