By Enrico Dela Cruz
September 1 (Reuters) – Dalian iron ore shed gains from an earlier rebound on Thursday, pressured by concerns over new COVID-19 restrictions and problems in China’s property sector that are squeezing demand for ferrous metals.
The most traded iron ore, for January delivery, on China’s Dalian Commodity Exchange DCIocv1 ended the day’s trade down 1.2% at 675.50 yuan ($97.88) per ton.
Steel Ingredient’s Most Active October Contract on Singapore Stock Exchange SZZFV2 was down 4.3% at $96.25 a tonne, as of 0847 GMT.
The drag from COVID-19, which is disrupting production and demand, and a struggling real estate sector in China, as well as the prospect of a global economic meltdown as central banks raise interest rates to calm inflation , have stoked concerns about the demand for the metals.
“Steel traders lack confidence in the market outlook,” analysts at Sinosteel Futures said in a note.
One of China’s largest cities, Chengdu, announced the lockdown of its 21.2 million people as it kicked off four days of citywide COVID-19 testing, as some of the centers most populous and largest cities in the country are fighting epidemics.
Nearly 70 Chinese cities, meanwhile, reported a fall in new home prices last month, the largest since the start of the pandemic, putting more pressure on local governments to quickly roll out containment measures. additional support for homebuyers and developers.
Although steel prices may see some support during what is traditionally a peak demand season between September and October, when construction activity picks up in China ahead of winter, analysts said there was little room for a rise.
If steel supply continues to rise as production resumes at some Chinese factories, prices are likely to fall further in September, industry news provider Mysteel said, citing chief analyst Wang. Jianhua.
Rebar on the Shanghai Futures Exchange SRBcv1 fell 1%, while hot rolled coils SHHCcv1 lose 0.6%. Stainless steel SHSScv1 down 0.4%.
Dalian Coking Coal DJMcv1 collapsed 3% and coke DCJcv1 fell 1.2%.
(Reporting by Enrico Dela Cruz in Manila; Editing by Subhranshu Sahu and Sherry Jacob-Phillips)
((enrico.delacruz@thomsonreuters.com))
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