MARKET NEWS

(Bloomberg) -- Iron ore headed for the lowest close since September on a seasonal slowdown in demand and signs Chinese mills are curbing steel output.

Futures fell for a fourth day in Singapore, sinking below $93 a ton. The rainy season in southern China, as well as high temperatures in the north, have persisted, slowing construction, Shanghai Metals Market said in a note.

On Monday, figures from China - the top iron ore importer - showed nationwide steel output in May was below April’s total on a daily basis, and almost 7% less than a year ago. It was the weakest showing for the month since 2018.

The steel-making staple has been under pressure in recent weeks as traders eye a slower pace of construction into the summer, as well as a push by authorities in China to curb steel output to combat a glut. Futures are coming off the back of a four-week losing run that was the longest since January.

“Steel demand in China is likely to remain weak over the coming months over the upcoming seasonal lull,” Citigroup Inc. said in a note, cutting iron ore forecasts. China’s property market weakness is showing no signs of a turnaround, and manufacturing faces increased trade headwinds, they said.

The bank’s prompt-to-three month price forecast was reduced to $90 a ton from $100, while the six-to-twelve month target was scaled back to $85 from $90.

On the supply side, miners in Brazil — the largest shipper after Australia — have been ramping up flows. Exports totaled 35.077 million tons in May, narrowly setting a record for that month.

Iron ore futures sank 1.5% to $92.65 a ton at 4:20 p.m. in Singapore. Steel futures in China also declined.