By Enrico Dela Cruz
(Reuters) – Prices of iron ore, steel and steelmaking ingredients in China slumped on Thursday, as risk sentiment was hit after the U.S. Federal Reserve signalled another rate hike by year-end and tighter monetary policy through 2024.
Traders at the same time opted to wait for details of China’s pledge to expedite the rollout of more policies to consolidate its economic recovery, while the country’s troubled property sector kept them guarded.
The most-traded January iron ore on China’s Dalian Commodity Exchange ended daytime trade 1.9% lower at 854 yuan ($116.93) per metric ton, after advancing in the last two sessions.
On the Singapore Exchange, the steelmaking ingredient’s benchmark October reference price fell as much as 3.4% to hit $117.70 per ton, after holding ground above $120 for several days.
China, the world’s top steel producer and metals consumer, will speed up introduction of more policies to consolidate its economic recovery, state media CCTV reported on Wednesday, citing a cabinet meeting chaired by Premier Li Qiang.
Iron ore extended its rally this month, after solid gains in August buoyed by China’s economic stimulus efforts, but the momentum seems to have lost steam.
While there were reports about additional policy support for China’s property developers at local government levels, analysts said the overall sentiment remains cautious.
“The Chinese property market continues to trend down and remains the largest uncertainty in the economy,” industry data and consultancy provider Mysteel said in its latest weekly outlook.
Analysts, however, said prices of iron ore were still supported amid low inventories at steel mills, and replenishment needs ahead of China’s National Day holiday from Sept.
29 to Oct. 6.
Coking coal and coke on the Dalian exchange down 3.6% and 2.7%, respectively.
Rebar shed 2%, hot-rolled coil dipped 2.3%, wire rod lost 2.8%, and stainless steel also slumped 2%.
(Reporting by Enrico Dela Cruz in Manila; Editing by Varun H K)
