Iron ore prices plummeted on Thursday as investors reacted negatively to China’s latest economic stimulus measures. The market expressed disappointment over the limited scope of policies aimed at reviving the country’s struggling property sector.
Futures contracts for iron ore on the Dalian Commodity Exchange fell by 5.99%, closing at 746.0 yuan ($104.74) per metric ton. This marked the lowest level since September 30.
The benchmark iron ore contract for November delivery on the Singapore Exchange also dropped by 5%, reaching $99.5 per ton.
China’s Ministry of Finance announced plans to expand its list of eligible housing projects for financing, aiming to increase bank loans for these projects to 4 trillion yuan ($562 billion) by year-end.
However, market participants viewed these measures as insufficient to address the property sector’s underlying issues.
Cameron Law, an analyst at Navigate Commodities, noted that fiscal stimulus expectations fell short. The Ministry failed to extend support beyond existing credit measures for property developers completing unfinished construction projects.
China’s Property Sector and Its Impact
The property sector plays a crucial role in China‘s economy, driving a significant portion of steel consumption. Recent years have seen the sector grappling with liquidity issues among developers and a general slowdown in property sales.
Adding to market concerns, major mining companies reported increased production levels. BHP exceeded first-quarter iron ore production estimates, while Vale announced its highest quarterly iron ore output since 2018.
Despite government efforts, analysts remain skeptical about the immediate recovery of China’s property market. Ni Hong, the Minister of Housing and Urban-Rural Development, claimed that the market has begun to stabilize after three years of adjustments.
However, many experts argue that the announced policies lack substantial measures to boost property demand. The current situation highlights the delicate balance between supply and demand in the iron ore market.
China’s economic policies and property sector performance continue to play a pivotal role in shaping global commodity prices.
As investors and industry players closely monitor developments, the market may experience further volatility in the coming weeks.
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| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| GOLD | 4,001 | -0.73% | -2.81% | 4,030 | 4,075 | 3,995 | 109,440 |
| SILVER | 52.03 | +1.81% | +2.78% | 51.10 | 53.18 | 51.42 | 41,687 |
| BRENT | 93.20 | +1.87% | +43.03% | 91.49 | 94.73 | 91.48 | 20,696 |
| WTI | 87.07 | +1.20% | +42.64% | 86.04 | 88.74 | 85.81 | 157,171 |
| COPPER | 6.28 | +1.02% | +24.45% | 6.22 | 6.33 | 6.26 | 37,679 |
| LITHIUM | 61.20 | +2.03% | -0.94% | 59.98 | 61.42 | 60.77 | 88,430 |
| IRON ORE | 161.91 | — | +56.34% | 161.91 | 161.91 | 1 | |
| SOY | 1,232 | +0.57% | +10.62% | 1,225 | 1,236 | 1,219 | 107,701 |
| CORN | 446.75 | -0.50% | +3.41% | 449.00 | 450.75 | 443.25 | 163,013 |
| WHEAT | 598.00 | +0.89% | +11.57% | 592.75 | 603.75 | 589.50 | 92,219 |
| COFFEE | 265.00 | -2.36% | -37.31% | 271.40 | 267.40 | 262.15 | 27,655 |
| SUGAR | 18.47 | +2.10% | +29.61% | 18.09 | 18.57 | 18.10 | 81,002 |
| COCOA | 5,073 | +6.98% | -12.97% | 4,742 | 5,084 | 4,807 | 28,753 |
| ORANGE JUICE | 146.15 | -0.41% | -17.24% | 146.75 | 146.95 | 142.35 | 487 |
| COTTON | 82.35 | +4.65% | +28.91% | 78.69 | 79.90 | 78.63 | 21,034 |
| BEEF | 218.48 | -0.33% | -3.84% | 219.20 | 219.73 | 217.38 | 21,242 |
| CATTLE | 327.48 | -0.87% | -3.02% | 330.35 | 334.33 | 329.50 | 7,319 |
| USD/BRL | 5.56 | -0.38% | +5.14% | 5.58 | 5.59 | 5.55 | — |
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