Iron ore futures have experienced a decline for the third consecutive session, largely influenced by concerns regarding demand prospects in China, the world’s largest consumer of the commodity. Without concrete details on anticipated stimulus measures from the Chinese government, market sentiment remains cautious.
The most actively traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) fell by 1.48%, settling at 765 yuan ($105) per metric ton. Earlier in the day, it had dropped to its lowest point since January 13, at 761.5 yuan per ton.
Similarly, the benchmark April iron ore contract on the Singapore Exchange saw a reduction, falling by 1.58% to $100.55 a ton. This marked its lowest level since March 12 at $100.15 per ton.
Analyst Chu Xinli from China Futures noted that a sharp decline in new construction data has weakened market confidence, leading to a widespread risk-off sentiment among traders. Official data revealed that new construction starts, measured by floor area, decreased by 29.6% in January and February, following a 23% drop in the previous year.
Additionally, concerns linger about demand amid the intensification of a global trade war, particularly due to new tariffs imposed by the U.S. government. India has introduced a temporary 12% tax on certain steel products for 200 days as a safeguard against imports.
Taiwan has also decided to continue its anti-dumping duties on stainless steel imports from China and South Korea for an additional five years. The broader steelmaking sector reflected this downturn, with coking coal and coke prices also declining by 2.65% and 1.81%, respectively.
Steel benchmarks on the Shanghai Futures Exchange likewise fell, as rebar, hot-rolled coil, and wire rod all registered losses. Analyst Chu suggests that a recovery in the steel market may require significant production cuts among steelmakers or unexpectedly strong consumption growth.