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| Iron Ore |
Sluggish steel production and a bleak property outlook weigh heavily on iron ore prices
Iron ore futures slid on Monday, pressured by weak steel demand in China and ongoing struggles in the country's real estate sector. The September contract on the Dalian Commodity Exchange (DCE) dropped 2.15% to 707 yuan ($98.56) per metric ton, hitting 704 yuan earlier, the lowest since May 12.
Meanwhile, the June benchmark contract on the Singapore Exchange also declined, falling 0.94% to $97.2 per ton.
Muted Steel Output and Property Slump Keep Prices Range-Bound
According to Mysteel, iron ore prices in both spot and futures markets dipped during May 19–23, with hot metal output falling 0.48% month-on-month to 2.4 million tons. This decline signals weaker demand from Chinese steelmakers as the seasonally slow period for steel consumption begins.
Everbright Futures noted that while output has decreased, production remains at historically high levels. However, persistent weakness in China's property and construction sectors continues to drag down domestic steel consumption.
A Reuters poll projects Chinese home prices to fall nearly 5% in 2024 and remain flat in 2026, reflecting a prolonged sector slump.
Further pressure came from a stronger U.S. dollar, following former U.S. President Donald Trump's decision to rescind a planned 50% tariff on EU goods. A stronger dollar generally dampens demand for dollar-denominated commodities such as iron ore.
Other steelmaking ingredients on the DCE were also down, with coking coal and coke falling 1.16% and 1.25%, respectively.
On the Shanghai Futures Exchange, steel benchmarks also fell:
- Rebar: down 1.51%
- Hot-rolled coil: down 1.94%
- Stainless steel: down 0.08%
- Wire rod: down 3.2%
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