SINGAPORE- Iron ore futures were poised to decline for a second straight session on Monday, as traders continued to wait on fresh news regarding stimulus in China amid idling production, while the country’s weak demand data dragged trader sentiment further.
The most-traded September iron ore on China’s Dalian Commodity Exchange sank 2 percent to 807.5 yuan per metric ton.
On the Singapore Exchange, the benchmark August iron ore was down 1 percent at $106.65 per metric ton.
“Iron ore prices remained under pressure amid steel output curbs,” ANZ Research said in a note on Monday. “Tangshan has ordered steel mills to curb output for all of July to combat worsening air quality. Extreme heat in the north of the country may also lead to slowing construction activity.”
Temperatures are forecast to hit over 40 degrees Celsius in some regions across China, Westpac added in a separate note.
The decline in futures prices can also be attributed to last weekend’s purge of leadership at the People’s Bank of China (PBoC) and a lack of updates on China’s stimulus, Westpac said.
China’s factory gate prices fell at the fastest pace in over seven-and-a-half years in June and missed expectations, while consumer prices were unchanged, as a faltering post-Covid recovery weighed on demand. – Reuters
