Dalian iron ore futures declined on Monday due to uncertainties surrounding the steel demand outlook caused by challenges in the property sector.
The property sector is expected to face long-lasting weaknesses, particularly in lower-tier cities and private developer financing, according to analysts at Goldman Sachs. Policymakers aim to reduce reliance on the industry for economic and fiscal growth, resulting in an anticipated “L-shaped” recovery for the property sector in the coming years.
The outlook for steel demand is shaky as construction activity in China typically experiences a slowdown during the summer months. This seasonal trend dampens the demand for steel, adding to the uncertainty in the steel market outlook.
The September contract for iron ore, traded actively on China’s Dalian Commodity Exchange, concluded the daytime trading session with a 1.81pct decrease, settling at 785.5 yuan (USD 110) per ton.
Correspondingly, other futures related to steelmaking on the Dalian Commodity Exchange experienced declines. Coke and coking coal futures dropped by 1.65pct and 0.2pct, reaching 2,022 yuan (USD 283) and 1,277.5 yuan (USD 179) per ton, respectively.
Rebar futures declined by 1.06pct to 3,652 yuan (USD 512) per ton, while HRC futures dropped by 0.82pct to 3,763 yuan (USD 527) per ton. Wire rod futures fell by 1.24pct to 4,073 yuan (USD 571) per ton. On the other hand, stainless steel futures experienced a slight increase of 0.89pct, reaching 15,265 yuan (USD 2,140) per ton.
1 USD / 7.13 yuan
