Iron ore futures prices snapped a five-day losing streak on Thursday amid heightened steel production in top consumer China, though gains were partially offset as a protracted crisis in China’s property market continued to weigh on demand prospects.

The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) closed up 0.43% at 698 yuan ($97.07) a metric ton.

The benchmark July iron ore on the Singapore Exchange inched up 0.6% to $92.95 a ton, as of 0703 GMT.

The daily combined consumption of iron ore sintering fines increased 2.4% week-on-week to 609,300 tons a day, the highest daily average usage in the past seven months, said consultancy Mysteel.

“Mills consumed larger amounts of the feedstock to maintain their elevated production.”

Still, downstream demand in China has entered the off-season, and inventories continue to accumulate, broker Hexun Futures said in a note.

Total iron ore stockpiles across ports in China climbed about 1.06% week-on-week to 133.4 million tons as of June 13, according to Steelhome data.

Moreover, real estate sales weakened and market sentiment has turned cautious, added Hexun.

China’s new home prices fell in May, extending a two-year-long stagnation, official data showed on Monday.

Demand for new homes in China is likely to remain substantially below the market’s 2017 peak over the next few years, Goldman Sachs said late on Monday, in a projection suggesting that the world’s second-biggest economy faces a long property slump.

“Meaningful growth in steel and iron ore demand is unlikely until new construction activity lifts,” said ANZ analysts.

Other steelmaking ingredients on the DCE eased, with coking coal and coke down 0.13% and 0.11%, respectively.

Steel benchmarks on the Shanghai Futures Exchange gained ground. Rebar and hot-rolled coil both rose 0.13% each, stainless steel strengthened 0.68% and wire rod inched up 0.12%.
Source: Reuters