Iron ore futures dipped more than 3 percent on Monday, as China’s subdued trade data for May dampened the market’s enthusiasm about demand prospects.
Falling steel prices and the resulting margin squeeze, also weighed on overall sentiment, analysts said.
China, which accounts for more than half of the world’s steel output, imported 89.79 million tonnes of iron ore last month, substantially lower than the 98.57 million tonnes it bought in April and 102.11 million tonnes in March.
The data also showed China’s May steel exports plunged 33.9 percent from a month earlier to 5.27 million tonnes.
The most-traded iron ore for September delivery on China’s Dalian Commodity Exchange ended the morning session 3.1 percent lower at 1,133 yuan ($177.03) a tonne, giving back earlier gains.
Iron ore’s most-active July contract on the Singapore Exchange slumped as much as 3.2 percent to $192.50 a tonne.
“The sharp drop in steel prices...has led to a sharp drop in the profits of steel mills,” analysts at Sinosteel Futures said in a note.
