Iron ore futures extended losses on poor China economic data, which showed a slowdown in industrial activities, due to power crunch.
The futures of Dalian Commodity Exchange (DCE) for January delivery then fell by 2.27% day-on-day or down RMB 16.50 to RMB 711/mt, during the day trading session on Monday.
The rebar futures also inched down by 1.20% day-on-day or down RMB 66 to RMB 5,422/mt, during the day trading session.
Slowdown of economic activities in China
China’s GDP growth hit 4.9% in Q3, under market estimate of 5.2%, while industrial production grew by 3.1% in September, below market expectation of 4.5%.
The lackluster growth indicated a slowing economic activity in China, amid the ongoing power shortage that limited industrial activities, which might extend till year-end.
The debt-ridden real estate sector also slowed the country’s growth recovery momentum, and reduced construction activities toward Q4.
Less steel output amid stringent curbs
Chinese steel output also took a plunge in September, due to expensive raw materials and stricter production restrictions.
According to National Bureau of Statistics (NBS), China’s daily average crude steel output fell to three years low at 2.46 million mt in September, down 8.6% from average output in August.
In the meantime, the country’s pig iron output also dropped to 671.1 million mt over the Jan-Sep period, down 1.3% on-year, based on the NBS data.
Market participants expected similar downward output trend may continue toward year-end, given the power shortages and winter output curb season.