SINGAPORE — Prices of iron ore futures dropped on Monday on subdued steel consumption in top consumer China, while persistent weakness in the country’s real estate sector also dampened market sentiment.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 2.15 percent lower at 707 yuan ($98.56) a metric ton.
Earlier in the session, the contract reached 704 yuan, its lowest levels since May 12.
The benchmark June iron ore on the Singapore Exchange traded 0.94 percent lower at $97.2 a ton.
“Chinese prices for imported iron ore fell in both spot and futures markets during May 19-23, with hot metal production at steelmakers slipping further amid the approaching low season for steel demand,” said consultancy Mysteel.
Hot metal output, typically used to gauge iron ore demand, eased 0.48 percent month-on-month to 2.4 million tons in May, broker Everbright Futures said, adding that while output has declined, production remains at a high level.
Continued challenges in construction and the real estate sector have had a significant drag on domestic steel demand, said broker Galaxy Futures.
