Fresh Lows Amid Declining China Steel Production

The SGX active iron ore contract continues to track lower, last under $94/bbl, very close to intra-session lows from April this year. Beyond these levels rests a test sub $90/ton, levels last seen in August last year.

• Today's mixed of China data outcomes with IP growth and fixed asset investment both surprising slightly on the downside, has likely weighed at the margins on sentiment in the space. Notably steel production was down 9% y/y in July. Onshore China steel futures continue to correct lower.
• Likewise in terms of still falling China property sales and on-going house price falls (albeit at a slightly reduced pace).
• Broader China equity sentiment has been more positive, although major indices printed multi month lows prior to the data prints earlier. Property related equity indices are just a touch above cycle lows.