(Bloomberg) -- Iron ore sank below $100 a ton, hitting the lowest level in more than two weeks, as China’s efforts to support growth underwhelmed investors, and miners continued to ramp up operations.
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Futures fell as much as 0.9% in Singapore, declining for a third day. China’s latest measures to kick-start its economy — a debt-swap plan — stopped short of direct stimulus, and inflation remains weak in the top iron ore user.
Iron ore’s slide on Tuesday came amid a broad retreat in commodities, with a gauge of the US dollar holding close to its highest level in a year. That makes raw materials priced in the currency more expensive for most buyers.
The steel-making ingredient is one of the year’s worst performing major commodities, losing more than a quarter of its value, as China’s economy slows despite government efforts to arrest the slide and fix a drawn-out property-sector crisis. Top miners, meanwhile, have been boosting flows, and Chinese port inventories are at their highest ever for this time of year.
“Iron ore, and base metal prices, will likely rise and fall in line with market speculation of Chinese stimulus over the next six months,” Vivek Dhar, an analyst at Commonwealth Bank of Australia, said in a note. Still, iron ore’s ability to sustain deeply negative mill margins in China without materially falling has been “eye‑opening,” he said, referring to the relative resilience of prices even as steel mills make losses.
The drop came despite a Bloomberg report that China is planning to cut taxes on home purchases, potentially aiding the property market. Regulators are working on a plan to allow so-called mega cities to cut the deed tax for buyers to as low as 1%, according to people familiar with the matter.
Iron ore futures traded 0.7% lower at $99.95 a ton at 2:11 p.m. in Singapore, after earlier sinking as low as $99.80. In China, yuan-priced contracts in Dalian dropped, and steel futures in Shanghai also declined.
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