BEIJING- Iron ore futures moved sideways on Monday with the Dalian benchmark extending falls for a second session, after authorities in top consumer China disappointed the market by not cutting medium-term policy rate as expected.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) dropped 1.4 percent to 950 yuan ($132.51) a metric ton.
China’s central bank left the medium-term policy rate unchanged on Monday, defying market expectations as signs of a weaker currency continued to limit the scope of monetary easing.
“The weakness in the ore market is partly because macroeconomic uncertainties mounted after the central bank did not cut rate,” said Pei Hao, a Shanghai-based analyst at international brokerage FIS.
Pei added it was also because “weak sentiment due to faltering demand and a quick-than-expect pick-up in portside ore inventory filtered through into this week, sending further downward pressure to prices.”
The continuous weakness came despite Beijing vowing better financing coordination for the housing sector.
