Yahoo Finance UPDATE 1-Iron ore tumbles on persistently weak fundamentals in China
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Dalian iron ore falls more than 5% to over 4-month low
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Singapore benchmark slips well below $110/t to over 6-month low
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Steel benchmarks slide on lower raw materials, lacklustre demand
(Updates closing prices)
BEIJING, March 11 (Reuters) - Iron ore futures prices extended their decline into a second straight session on Monday, to the lowest in more than four months, dragged down by the persistently weak fundamentals of the key steelmaking ingredient in top consumer China.
The most-traded May iron ore contract on China's Dalian Commodity Exchange (DCE) ended daytime trade 5.41% lower at 831 yuan ($115.68)a metric ton, the lowest since Oct. 23, 2023.
The benchmark April iron ore on the Singapore Exchange slid 6.71% to $107.45 a ton, as of 0808 GMT, the lowest since Aug. 22.
A temporary supply glut as a result of better-than-expected shipments so far in the first quarter of the year and weaker-than-expected demand recovery has put intense downward pressure on prices, analysts said.
"The global ore shipments have climbed to a relatively high level. The recent ore price fall has not triggered a production reduction among non-mainstream suppliers," analysts at Citic Futures said in a note.
"Some mills postponed again the timing of production resumption, curbing ore demand rise and destocking at ports," they added.
Poor profitability among steelmakers dented their interest in ramping up output, and the weakness in the steel market permeated into the upstream raw materials market, weighing on ore prices, analysts at Everbright Futures said in a note.
Other steelmaking ingredients on the DCE lost ground, with coking coal and coke down 2.65% and 2.04%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were similarly weaker. Rebar slipped 2.41%, hot-rolled coil shed 1.95%, wire rod fell 1.62% and stainless steel surrendered 1.34%.
The weakness in the ferrous market came despite Chinese regulators asking large banks to step up support for Vanke, a state-backed property developer.
Property market in China, the largest steel consumer, has been hit hard by a debt crisis and not yet shown obvious signs of improvement despite various measures introduced by Beijing to revive the sector. ($1 = 7.1838 Chinese yuan) (Reporting by Amy Lv and Andrew Hayley; Additional reporting by Zsastee Ia Villanueva; Editing by Mrigank Dhaniwala and Sohini Goswami)
