Iron ore sinks to 10-month low on gloom over China construction

Iron ore sinks to 10-month low on gloom over China construction

Iron ore dropped to the lowest level in 10 months as China’s years-long property crisis keeps pressure on prices even amid wider signs of a pick-up in growth.

The steelmaking material fell as much as 3.9% to $96.25 a ton in early trading on the Singapore Exchange. Prices have floundered since early January as investors adjust to weaker demand prospects from the real-estate sector.

There are few indications that a meaningful turnaround in the property industry is on the cards. The value of new home sales from the 100 biggest real estate companies dropped about 46% in March from a year earlier.

The China Iron & Steel Association last week warned that the property downturn and relatively weak infrastructure were delaying a recovery in steel demand. The steel industry’s purchasing managers index for March sank to 44.2 — its lowest reading since May last year.

Dalian iron ore futures for September also fell Monday, adding to an 8.5% decline last week. Futures for steel rebar — basic metal rods used in construction — fell to the lowest in almost four years.