Iron ore futures hit three-week lows on Thursday amid fresh concerns about recovery prospects for China’s struggling property sector, with sentiment further dampened by flooding in the country’s top steelmaking province of Hebei.
The most-traded September iron ore on China’s Dalian Commodity Exchange ended morning trading 2.1 percent lower at 818 yuan ($113.77) per metric ton, after hitting 816.50 yuan earlier in the session, its weakest since July 12.
On the Singapore Exchange, the steelmaking ingredient’s benchmark September contract slumped as much as 2.1 percent to $101.75 per ton, its lowest since July 10, and was on track for a third straight day of decline.
“Iron ore markets slipped further given limited signs of fresh policy stimulus and ongoing weakness in residential property markets in China,” Westpac analysts said in a note.
Some city governments in China, the world’s biggest steel producer, have made it harder for developers to access tens of billions of dollars from property sales held in escrow accounts, Reuters reported on Wednesday, citing people familiar with the matter.
The tightening raises risks that the cash-strapped companies will be squeezed even more, and appears to run contrary to Beijing’s assurance that it will help stabilize the sector.
