Aluminum price soars as China cancels tax incentive on exports
Futures in London jumped as much as 8.5%.
The iron ore price retreated for the first time in nine sessions as Goldman Sachs Group warned that property weakness would likely be a multi-year growth drag for China’s economy.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $111.72 a tonne Monday morning, down 3.76%.
Futures in Dalian fell 3%.
The investment bank said in a note that it sees persistent problems in Chinese real estate, mainly related to lower-tier cities and private developer financing. There was no quick fix and the property recovery was likely to be “L-shaped,” according to Goldman.
The warning comes after iron ore jumped 14% over the previous eight sessions as Beijing stepped up wider measures to revive its stalled recovery, and also on hopes for more targeted policy to improve the property market.
Goldman said it didn’t expect more housing-specific stimulus and suggested Beijing would likely seek to reduce economic and fiscal reliance on the sector.
“We noticed some bulls are exiting as investors are cautious in chasing a rally like this,” said Wei Ying, an analyst at China Industrial Futures Co.
“After all, the iron ore market will be in a slight surplus in the second half and we expect inventories at Chinese ports to increase.”
(With files from Bloomberg)
