Futures Iron Ore Prices in China Hit a Two-Month Low

Forex - China's futures iron ore contracts fell to their lowest level in nearly two months on Friday, registering a weekly decline due to weakness in the country's real estate sector, strengthened supply, and expectations of reduced seasonal steel demand.

The most traded January iron ore contract on the Dalian Commodity Exchange (DCE) ended the daytime session down 3.09% at 736.0 yuan ($101.80) per metric ton, marking the lowest level since September 27. This week, it lost 6.18% in value.

The benchmark December iron ore on the Singapore Exchange was trading at $96.6 per ton with a decline of 1.7% as of 11:50 AM UTC, representing a weekly decrease of 4.18%.

In October, new home prices in China showed the largest decline since 2015, and according to official data released on Friday, real estate investments fell by 10.3% in the first ten months of 2024, indicating that Beijing's support measures for the sector have had very little effect so far.

Atilla Widnell, Managing Director of Navigate Commodities, mentioned that the "aggressive" increase of 2.17 million tons in Australian iron ore shipments for the week ending November 10, along with a rise of 2.31 million tons in China's iron ore arrivals, should weaken futures and prices.

Widnell stated, "At the same time, we anticipate that China's blast furnace smelting activities will continue to decline during the winter months in response to the significant drop in construction steel demand."

Chinese consultancy Mysteel noted that the seasonal slowdown in construction activities, due to the cooling weather in much of China, has impacted steel demand, with work on construction sites in northern regions slowing down or halting.