Iron ore futures edged lower on Tuesday as China’s fragile property sector and a dip in crude steel output continued to weigh on market sentiment, despite better-than-expected industrial and GDP data.
The September iron ore contract on the Dalian Commodity Exchange (DCE) slipped 0.07% to 765.5 yuan ($106.75) per metric ton as of 0250 GMT, while the benchmark August iron ore contract on the Singapore Exchange dropped 0.59% to $99 per ton.
Investor confidence was shaken after China’s new home prices registered their sharpest monthly drop in eight months in June, reflecting persistent weakness in the housing market — a critical consumer of steel and construction materials.
Adding to the pressure, China’s crude steel output in June fell 3.9% month-on-month and 9.2% year-on-year, as more steelmakers conducted equipment maintenance and demand weakened due to hot temperatures in the north and heavy rains in the east and south.
Meanwhile, steel benchmarks on the Shanghai Futures Exchange also declined:
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Rebar dipped 0.35%
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Hot-rolled coil fell 0.21%
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Wire rod tumbled 1.37%
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Stainless steel eased 0.04%
Other steelmaking ingredients traded lower on DCE, with coking coal down 0.16% and coke shedding 0.59%.
Despite these setbacks, China’s Q2 GDP grew by 5.2% year-on-year, and industrial output in June rose 6.8%, both beating market expectations. Analysts from ANZ noted that strong steel production, low inventories, and healthy margins encouraged mills to restock raw materials, though gains remain limited due to expectations of tighter capacity controls.
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In the seaborne market, iron ore shipments from Australia fell due to port maintenance, while Brazil’s exports rebounded, according to broker Hexun Futures.
The short-term outlook for iron ore remains volatile, as policy uncertainty, tariff fears, and seasonal construction slowdowns continue to challenge sustained demand recovery.