Iron ore slides to over two-week low amid weakening China demand
BEIJING, June 3 (Reuters) -Iron ore futures prices slipped to their lowest levels in more than two weeks on Monday, as signs of weakening steel demand in top consumer China broadly weighed on sentiment.
As of 0247 GMT, the most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 traded 1.62% lower at 852.5 yuan ($117.66) a metric ton, the lowest since May 15.
The benchmark July iron ore SZZFN4 on the Singapore Exchange was 1.56% lower at $113.35 a ton, also the lowest since May 15. Prices slid more than 4% last week.
The pressure on prices is due to the seasonally softening downstream steel demand, coupled with weakening fundamentals of the key steelmaking ingredient, analysts at Sinosteel Futures said in a note.
China's manufacturing activity unexpectedly fell in May, an official factory survey showed on Friday. However, a private sector survey showed on Monday that manufacturing activity grew at the fastest pace in about two years last month.
The contrast pointed to a mixed picture of the sprawling industry.
"The trading logic of iron ore in June will be the gaming of two factors: a possibly improved macro economic policy will lift its valuation, while the control over crude steel output will affect steel balance sheet and weigh on sentiment," analysts at Galaxy Futures said in a note.
China's finance ministry has allocated 6.44 billion yuan to subsidise auto trade-ins in 2024, state television reported on Monday.
Other steelmaking ingredients on the DCE also continued downtrend, with coking coal DJMcv1 and coke DCJcv1 down 0.36% and 2.12%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were weaker amid lower raw materials prices.
Rebar SRBcv1 shed 1.13%, hot-rolled coil SHHCcv1 lost 0.86%, wire rod SWRcv1 fell 0.86% and stainless steel SHSScv1 dipped 0.45%.
($1 = 7.2452 Chinese yuan)
Reporting by Amy Lv and Mei Mei Chu; Editing by Savio D'Souza
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