Iron-ore tumbled following a five-day run of gains as China’s markets reopened, with investors weighing prospects for near-term steel demand in the world’s largest importer.
Futures dropped from the highest close since the end of January, slumping as much as 3.3% to pare most of last week’s gain. While Premier Li Qiang called for “pragmatic and forceful” action to boost confidence in the economy, Beijing opted to keep the interest rate on its one-year policy loans steady.
There are mixed signals on the outlook. Steel consumption remains tepid, with profits in the industry poor, although local governments may step up efforts to aid activity, according to Minmetals Futures Co. Ltd. Still, major projects in provinces including Guangdong are restarting, according to Mysteel, and data showed a rise in existing home sales in key cities during the break.
Iron ore has backtracked this year amid concerns over China’s long-running property crisis, a sector that accounts for close to 40% of steel demand. Further insights into the outlook will come this week as major iron ore producers including BHP Group Ltd. and Rio Tinto Group are scheduled to unveil earnings.
Iron ore was 2.9% lower at $127.50 a ton at 11:32 a.m. in Singapore. In China, iron ore in Dalian, and rebar and hot-rolled coil in Shanghai all fell.
Most base metals were also weaker. Copper dropped 0.7% to $8,427.50 a ton on the London Metal Exchange, declining from the highest close in two weeks, while tin, lead, and nickel also retreated.