Iron ore needs China stimulus action, not just words: Russell

LAUNCESTON, Australia (Reuters) -Iron ore prices have slipped for three straight weeks, with the decline reflecting an evaporation in confidence over China's economic stimulus, which in turn threatens to hit demand for the steel raw material in coming months.

Spot 62% iron ore for delivery to north China, as assessed by commodity price reporting agency Argus, ended at $116.05 a tonne on June 24, down 4.8% from the week before.

The benchmark price has declined 27.6% from its 2022 high of $160.30 a tonne on March 8.

That peak was driven by fears of supply disruption after Russia's invasion of Ukraine, which was the fifth-largest exporter of iron ore after Australia, Brazil, South Africa and Canada.

While the Ukraine war rally was short-lived, iron ore did respond positively to signs that China would boost economic activity in the wake of a series of lockdowns of major cities, imposed as part of its strict zero-COVID policy.

But that optimism has been ebbing away amid signs that the key construction sector, the major consumer of steel, is struggling to re-ignite, with new home prices falling for a second month in May, and property sales by floor area contracting 16.8%in the first five months of 2022 from the same period a year earlier.

While there has been some recovery in manufacturing, the iron ore and steel sectors will be much more focused on property and infrastructure spending as a driver of demand.