BEIJING- Dalian iron ore futures prices fell for a second consecutive session on Thursday, as investors maintained a cautious stance amid an uncertain demand outlook following weak economic data in top consumer China.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 0.58 percent lower at 935.5 yuan ($130.00) a metric ton. Earlier in the session the contract hit 920.5 yuan a ton, its lowest level since Dec. 19.
The economic recovery in China was far shakier than many analysts and investors expected, with a deepening property crisis, mounting deflationary risks and tepid demand casting a pall over the outlook for this year, despite achieving the official target of 5 percent .
“It’s more of a round of downward correction, which we expect to likely last until after the Lunar New Year holiday break,” said a Chinese iron ore analyst, requesting anonymity as he is not authorized to speak to media.
Iron ore was overvalued driven by expectations of more stimulus and robust pre-holiday restocking, the analyst said, adding “this does not necessarily mean that ore prices will start a free fall as fundamentals are not that bad.”
