Iron ore futures fell in Singapore on Wednesday, while the Dalian benchmark contract swung back and forth, as a crisis engulfing property developers in top steel producer China outweighed improving margins at mills.
Iron ore’s front-month September contract on the Singapore Exchange was down 1.6 percent at $112.85 a ton, extending losses to a fourth session.
On China’s Dalian Commodity Exchange, the steelmaking ingredient’s most-traded September contract ended volatile morning trade up 0.4 percent at 796 yuan ($117.88) a ton.
After last week’s solid gains for iron ore, sentiment has turned shaky. A private survey showed on Monday that China’s July new home prices and sales volume both fell from a month earlier.
Already grappling with a debt crisis and weak demand, China’s property market has been further rocked recently by a mortgage boycott.
Analysts said confidence is unlikely to be quickly restored despite government support for the industry.
“The recovery will be slow and gradual, with two major uncertainties ahead: the impact of recent mortgage boycotts on homebuyers’ confidence (and) revival of more lockdowns,” J.P.Morgan analysts said in a note.
China’s ailing property sector and its decarbonization goal, which entails cutting annual steel production for a second straight year, remain key concerns for iron ore traders, though rebounding steel margins offer support.
