Dalian and Singapore iron-ore futures fell on Friday, reversing gains in the previous session, as traders weighed demand prospects in top steel producer China that has been plagued with a debt crisis in its real estate industry.
The most-traded iron ore, for delivery in January next year, on China's Dalian Commodity Exchange DCIOcv1 ended daytime trade 0.6% lower at 730.50 yuan ($108.42) a tonne. The contract, however, was on track for a weekly gain of more than 2% driven by a rebound in margins at mills.
On the Singapore Exchange, the front-month September contract SZZFU2 was down 1.8% at $110.25 a tonne, as of 07:00 GMT.
"The iron ore market remains on shaky ground," ANZ commodity strategists said in a note. "Demand in China still faces headwinds from a real estate downturn and constraints on steel industry emissions."
Chinese steel industry regulators and leaders remain committed to curbing annual output that began last year in line with the country's decarbonisation goals and a sector-wide consolidation plan to eliminate overcapacity.
Covid-19 lockdowns and financial troubles facing Chinese property developers - a sector that accounts for about 40% of domestic steel demand, according to ANZ analysts - have also clouded the outlook for demand for both steel products and inputs.
Chinese property developer Redsun Properties 1996.HK said it has not made offshore interest payment due August 13 on 2025 notes and does not expect to make it by the end of the grace period.
But hopes of sustained government support for the property industry and signs that steel demand is stabilising supported steel futures.
Rebar on the Shanghai Futures Exchange SRBcv1 rose 1.7%, while hot-rolled coil climbed 1.2%, both on track for their fourth consecutive weekly gains.
Stainless steel SHSScv1 gained 0.6%.
Other steelmaking inputs also rose, with Dalian coking coal DJMcv1 up 2.7% and coke DCJcv1 adding 2.6%.