China’s XCMG signs deal with Simfer for Simandou iron ore project
China's leading construction machinery manufacturer will provide $112m in core mining equipment.
Iron ore futures fell on Wednesday to their lowest in more than a year, as disappointing credit data from top consumer China worsened market sentiment already dampened by diminishing demand and high supply.
The most-traded iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 3.32% lower at 713 yuan ($99.74) a metric ton.
The contract hit its lowest since June 1, 2023 at 706.5 yuan earlier in the session.
The benchmark September iron ore on the Singapore Exchange hovered below the key psychological level of $100 a ton for a fifth straight session, down 2.74% to $95.75 as of 0719 GMT.
It touched the lowest since May 31, 2023 at $95.2 earlier in the day.
China’s bank lending tumbled more than expected in July, hitting the lowest in nearly 15 years, dragged down by tepid credit demand and seasonal factors.
“The credit data in July remained weak, souring sentiment… hot metal output showed signs of further declines given that many mills are suffering losses,” analysts at Everbright Futures said in a note.
China’s iron ore demand in 2024 will shrink by 33.4 million tons, Jia Yanlin, the director of the research institute of China Mineral Resources Group (CMRG), was cited as saying by a state-backed media.
CMRG was established in July 2022 to enhance Beijing’s iron ore pricing power and ensure a secure supply chain for some key mineral resources.
Jia forecast ore supply to China this year to increase by 71 million tons from the year earlier, and China’s steel exports to hover near 90 million tons, similar to the levels seen in 2023.
Other steelmaking ingredients on the DCE also retreated, with coking coal and coke down 2.77% and 1.85%, respectively.
Steel benchmarks on the Shanghai Futures Exchange slid to multi-year lows.
Rebar, hot-rolled coil and wire rod tumbled more than 3% each and stainless steel shed 0.91%.
($1 = 7.1486 Chinese yuan)
(By Amy Lv and Mei Mei Chu; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)
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