SINGAPORE- Iron ore futures fell for a second straight session on Tuesday, weighed by mounting concerns over demand outlook in top consumer China despite the country’s latest move to revive its struggling property market.
China lowered the five-year loan prime rate (LPR) by 25 basis points to 3.95 percent from 4.20 percent previously, compared to a forecast of a cut of five to 15 bps in a Reuters poll.
However, this was not enough to counter the broad and persistent weakness in the ferrous market.
The most-traded May iron ore on China’s Dalian Commodity Exchange ended morning trade 3.64 percent lower at 926.5 yuan ($128.72) per metric ton, the lowest since Jan. 18.
The benchmark March iron ore on the Singapore Exchange slipped 2.58 percent to $124.1 a ton as of 0321 GMT, the lowest since Feb. 6.
China’s central bank left a key policy rate unchanged on Sunday when rolling over maturing medium-term loans, with uncertainties around the timing of an easing by the Federal Reserve limiting Beijing’s room to maneuver on monetary policy.
“The PBoC opted to keep interest rates on its one-year policy loans unchanged, raising concerns about demand in the near term… new construction looks weak, with new homes sales down 34 percent y/y in January,” analysts at ANZ bank said in a note.
