The iron ore price fell on Wednesday as a crisis engulfing property developers in China outweighed improving margins at mills.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $109 a tonne Wednesday morning, down 4.5%.
Iron ore’s most-traded September contract on China’s Dalian Commodity Exchange ended volatile daytime trade 0.8% lower at 786.50 yuan ($116.44) a tonne.
Sentiment has turned shaky after iron ore’s solid gains last week. A private survey showed on Monday that China’s July new home prices and sales volume both fell from a month earlier.
China’s property market, which is already grappling with a debt crisis and weak demand, has been further rocked recently by a mortgage boycott.
Analysts said confidence is unlikely to be quickly restored despite government support for the industry.
“The recovery will be slow and gradual, with two major uncertainties ahead: the impact of recent mortgage boycotts on homebuyers’ confidence (and) revival of more lockdowns,” J.P.Morgan analysts said in a note.
China’s ailing property sector and its decarbonization goal, which entails cutting annual steel production for a second straight year in 2022, remain key concerns for iron ore traders, though rebounding steel margins offer support.
