Chinese Iron Ore Futures Slide After Home Prices Weaken

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Chinese iron ore and steel futures tumbled to record lows on Tuesday after data showed a deepening decline in China’s home prices, the latest evidence of economic weakness in the top consumer of both commodities.

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China’s home prices fell an annual 2.6% in October despite a range of government support measures, Reuters reported. It was the steepest year-on-year fall since Reuters started calculating nationwide prices in 2011.

The losses in futures could stretch iron ore’s rout. The steelmaking ingredient is at its weakest since 2009 and has fallen 44%  this year as big, low-cost miners such as Rio Tinto, BHP Billiton and Vale boosted output amid slowing demand growth in top importer China.

On Tuesday, November 18, the day’s biggest mover was the US HRC futures contract spot price, which saw a 0.3% increase to $634.00 per short ton. This increase comes after three straight days of stagnant prices. The US HRC futures contract 3-month price fell 0.3% to $632.00 per short ton.

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Chinese steel prices were flat for the day. The price of iron ore 58% fines from India hit a high price of CNY 840.00 ($137.17) and a low price of CNY 830.00 ($135.54) per dry metric ton. The price of Chinese HRC held steady at CNY 2,970 ($485.00) per metric ton. The price of Chinese coking coal saw essentially no change for the fifth day in a row, remaining around CNY 1,390 ($226.99) per metric ton.

The cash price of steel billet was unchanged on the LME at $465.00 per metric ton. For the fifth consecutive day, the 3-month price of steel billet held flat on the LME at $455.00 per metric ton.

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