Iron ore hits three-month low on bleak China demand outlook
Updates closing prices, adds details
By Gabrielle Ng
SINGAPORE, July 23 (Reuters) -Iron ore futures fell to their lowest in more than three months on Tuesday, as a lack of stimulus from top consumer China's third plenum fanned prospects of bleak demand.
The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trade 3.43% lower at 774.5 yuan ($106.47) a metric ton, its lowest since April 8.
The benchmark August iron ore SZZFQ4 on the Singapore Exchange fell 3.36% to $100.0 a ton as of 0720 GMT, also its lowest level since April 8.
Iron ore's persistent losses come amid a "dour outlook" for demand in China, ANZ analysts said in a note.
China's shaky economic recovery continues to be plagued by weak domestic demand, persistent deflationary pressures and an anaemic property sector.
Without further stimulus measures, there is little hope for a near-term recovery for the property and construction sector, ING analysts said in a note.
As long as unsold housing inventories remain elevated, new investment and building activity will remain depressed, and the drag on China's property market growth will persist, they added.
China surprised markets by cutting major short- and long-term interest rates on Monday, signalling intent to boost growth in the world's second-largest economy just days after a Communist Party leadership meeting.
While a step in the right direction, the rate cuts seemed to have underwhelmed markets with commodity prices continuing to show softness, Westpac analysts said.
The softer outlook for China and the global economy more broadly was weighing on prices, added Westpac.
Other steelmaking ingredients on the DCE also lost ground, with coking coal DJMcv1 and coke DCJcv1 down 2.44% and 2.54%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were mostly down. Rebar SRBcv1 lost nearly 1.9%, hot-rolled coil SHHCcv1 fell 1.75%, wire rod SWRcv1 shed 1.45%, while stainless steel SHSScv1 gained almost 1.5%.
($1 = 7.2745 Chinese yuan)
Reporting by Gabrielle Ng; Editing by Sherry Jacob-Phillips and Varun H K
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