China's iron ore and steel futures dipped on Tuesday (Sep 20), as concerns about the country's persistent zero-Covid policy and ailing property sector keeping demand subdued outweighed news about a plan to relax the country's border restrictions.
Caution also prevailed ahead of an expected hefty interest rate hike by the US Federal Reserve this week.
The most-traded January iron ore on China's Dalian Commodity Exchange ended daytime trade 3.1 per cent lower at 696 yuan (S$139.7) a tonne.
Rebar on the Shanghai Futures Exchange fell 1.5 per cent, while hot-rolled coil shed 2 per cent.
"Rolling regional lockdowns under the zero-Covid policy represent a continuing risk for drag, and the housing market remains substantially weakened," JPMorgan analysts said in a note.
Beijing issued draft rules aimed at making it easier for some foreigners to enter China for visits to tourism sites along its border - following months of border shutdown due to the pandemic.
China also reported on Tuesday a lower number of new Covid-19 cases, with Beijing reporting no local cases for the fourth consecutive day.
Iron ore's benchmark October contract on the Singapore Exchange reversed early gains, and was down 0.9 per cent at US$96.20 a tonne, as of 0709 GMT.
Dalian coking coal dropped 1.1 per cent, also pulling back, while coke trimmed its gains to 1 per cent. Shanghai stainless steel slipped 0.3 per cent.
"Iron ore has good short-term fundamentals and prices are supported, but the demand for finished (steel) products is not good," analysts at Zhongzhou Futures said in a note.
Hopes also waned for additional policy support in the near term to shore up China's economy that has been hit hard by Covid-19 curbs and property sector downturn.
China made a tough call to hold its benchmark lending rates steady on Tuesday, balancing the need to support economic growth with keeping yuan depreciation in check. REUTERS