Iron ore drops as China’s home sales fall and construction eases

Iron ore has slipped on renewed signs of weakness in the property market and as China heads into winter when construction activity typically drops.

Futures for the steelmaking material fell for the first time in five days, losing as much as 1.2 per cent in Singapore. New home sales contracted across China’s four first-tier cities in the week to November 10, with Beijing suffering the greatest decrease.

Meanwhile, mills in the steel hub of Tangshan ramped up run rates. An oversupply of steel has left steelmakers with little room for profit expansion, according to a weekly report by Huatai Futures.

China may keep pushing for a lower policy rate and bank reserve requirements to shore up its recovery, according to the state-owned China Securities Journal.

Meanwhile, daily iron ore exports from Brazil climbed to 1.75 million tonnes in the first week of November, according to data published on the website of the economy ministry. In November 2022, the country shipped about 1.66mt a day, based on figures reported by the ministry.

Iron ore traded 0.4 per cent lower at $US127.60 a tonne in Singapore by 11.30am local time. Futures in Dalian and steel prices in Shanghai edged down.

Bloomberg