Iron ore sinks – ING
Iron ore prices sank below $93/t as demand continues to slow down in China. Demand from China is likely to remain weak amid the continued slowdown in China’s property market. Iron ore is among the most vulnerable to China's slowdown risks, as the country's property market constitutes the bulk of steel demand, ING's commodity experts Ewa Manthey and Warren Patterson note.
Authorities in China push mills to curb steel output
"Data from China this week revealed that new-home prices have experienced their steepest decline in seven months. China’s property market saw a 0.2% decline in new home prices in 70 cities in April. China’s new home starts – the biggest steel demand driver – have also continued to fall."
"This should suppress steel demand in the months ahead. The country's recent stimulus policies have focused on clearing property inventories rather than boosting new starts, which will limit the impact on steel demand as it requires new construction rather than clearing unsold stock."
"This week, data from China showed nationwide steel output in May was below April’s daily total and almost 7% lower than a year ago as authorities in China push mills to curb steel output to combat a glut."
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FXStreet Insights Team
FXStreet
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