The old "boom, no it's a bust" mentality among iron ore traders emerged Monday when Singapore prices slid 4% or more on nerves about Chinese demand.
It was only a week ago that the same traders were confident China had done something positive with its latest property sector support measures revealed on May 17.
Traders ignored the paucity of the measures compared to the realities and enormous black holes throughout the sector. Iron ore prices were higher last week.
Then, the official survey of manufacturing activity for May came in weaker than expected, but on Monday, a private survey of activity among small and medium businesses came in a little better than expected.
And on Monday, iron ore prices fell to six-week lows around $US110 a tonne on the SGX trading platform in Singapore. That fall came despite figures showing no real rise in portside iron ore stocks.
What the fall was probably more driven by is the realization that China is backing efforts to cut carbon consumption and emissions and is looking to chop 100 million tonnes of annual coal consumption and hundreds of millions of tonnes of carbon emissions – and that means production cuts or restrictions, which in turn lower demand for key commodities.
Iron ore futures in Singapore fell as much as 4.4% to $US110.40 a ton, the lowest since April 17, before ending the trading session at $US110.65. Prices on the Dalian market in China dropped 2.5%, while steel contracts retreated in Shanghai, especially rebar.
