Tuesday, January 16, 2024

Iron ore drops as China cenbank’s rate move defies expectation | Dredger Jobs

Iron ore futures prices dropped for a second consecutive session on Monday as top consumer China defied market expectations and stood pat on its medium-term interest rate, leaving traders disappointed.

The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) closed daytime trade 3.17% lower at 933 yuan ($130.10) a metric ton, the lowest since Dec. 20, 2023.

The benchmark February iron ore SZZFG4 on the Singapore Exchange was 1.38% lower at $127.9 a ton, as of 0702 GMT, hitting the lowest since Dec. 5.

China’s central bank left the medium-term policy rate unchanged on Monday, defying market expectations as signs of a weaker currency continued to limit the scope of monetary easing.

“The weakness in the ore market is partly because macroeconomic uncertainties mounted after the central bank did not cut rate,” said Pei Hao, a Shanghai-based analyst at international brokerage FIS.

Pei added it was also because “weak sentiment due to faltering demand and a quicker-than-expect pick-up in portside ore inventory filtered through into this week, sending further downward pressure to prices.”

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