As of August 7, 2024, iron ore prices declined for the second consecutive session, driven by weak short-term demand from China.
Concerns about consumption towards the end of the year also contribute. This trend affects both Chinese and international markets.
Market Performance
- Dalian Commodity Exchange (DCE): The most-traded January iron ore contract on the DCE closed down 2.41% at 749 yuan ($104.32) per ton. This marks its lowest value since August 2.
- Singapore Exchange: The benchmark September iron ore contract fell by 1.75% to $101.05 per ton. It also hit its lowest level since August 2.
Factors Influencing the Decline
Weak Demand from China
China’s demand for iron ore has been sluggish due to several factors:
- Steel Market Slowdown: Analysts from First Futures noted a persistent slowdown in the steel market. This makes it difficult to see substantial upward momentum for iron ore prices.
- Export Uncertainty: Increasing doubts about China’s strong steel export momentum in the second half of the year dampen iron ore purchases.
- Property Market Crisis: China’s ongoing property market crisis significantly impacts demand. Property investment fell by 10.1% in the first half of 2024. Home sales by floor area declined by 19%.
