Iron ore posts weekly loss on lack of China stimulus, demand outlook

Iron ore futures prices fell on Friday to post a weekly loss, as a lack of concrete stimulus from top consumer China and weak seasonal demand for steel weighed on the market.

The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trade 0.19% lower at 804.5 yuan ($110.72) a metric ton, declining 2.54% from last Friday’s closing price.

The contract hit an intraday low of 792.5 yuan, its weakest since June 26.

The benchmark August iron ore SZZFQ4 on the Singapore Exchange was 0.99% lower at $104.45 a ton, as of 0730 GMT. It was down 2.33% week-on-week, its sharpest weekly drop since June 7.

Most steel benchmarks on the Shanghai Futures Exchange posted marginal gains on Friday. Rebar SRBcv1, hot-rolled coil SHHCcv1 and stainless steel SHSScv1 ticked up about 0.1% each, while wire rod SWRcv1 lost 0.25%.
Seasonal land sales are at a multi-year low, suggesting weak demand prospects for steel, while China’s iron ore inventories are at a multi-year seasonal high, signalling weak demand and strong supply, ANZ analysts said in a note.

Rising portside inventories remained a headwind, with the total piled up at 45 Chinese major ports scaling a new high since mid-April 2022, rising 0.9% week-on-week to 151.3 million tons as of July 18, data from consultancy Mysteel showed.

Iron ore also fell after China’s third plenum failed to signal any major policy shift amid soft economic data, the ANZ analysts added.

Chinese officials acknowledged on Friday the sweeping list of economic goals re-emphasised at the end of the key Communist Party meeting this week contained “many complex contradictions,” pointing to a bumpy road ahead for policy implementation.

Other steelmaking ingredients on the DCE were mixed. Coking coal DJMcv1 added 0.29%, while coke DCJcv1 lost 1.13%.
Source: Reuters (Reporting by Gabrielle Ng; Editing by Subhranshu Sahu)