Iron ore crashes on economic gloom, supply pressures
IRON ore futures tumbled on Friday (Oct 28), with the steelmaking ingredient sinking below US$80 per tonne in Singapore and leading a ferrous market rout in China, spurred by a gloomy outlook for global steel demand and supply-side pressures.
The most-traded November iron ore on the Singapore Exchange fell as much as 3.6 per cent to US$78.80 a tonne, the lowest since 2020. It was down 2.2 per cent at US$79.90, as of 0801 GMT, and has fallen more than 50 per cent from its April peak above US$160.
On China’s Dalian Commodity Exchange, the most-active January contract ended daytime trade 4.9 per cent lower at US$86.31 a tonne, on track for its third consecutive weekly fall.
Spot iron ore, meanwhile, tumbled this week to the lowest since May 2020 below US$90 a tonne, as negative margins prompted Chinese steel mills to rein in output.
With weakening global steel demand and top steel producer China’s economy hit by Covid-19 curbs and property slump, analysts do not see a year-end rebound for steel and iron ore.
The International Monetary Fund said it does not expect a speedy resolution to the property turmoil in China.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Fresh Covid-19 lockdowns in China, expectations of further US interest rate hikes, and signs of increasing iron ore supply also added pressure on prices.
Australia’s Fortescue Metals Group reported a 4.2 per cent year-on-year rise in quarterly shipments, while Brazil’s Vale SA’s quarterly output grew 1.1 per cent.
“Weakness in the Chinese property market remains a headwind for steel and iron ore,” ANZ commodity strategists said in a note. “Supply-side issues have also weighed on the market.”
Other steelmaking inputs also extended losses, with Dalian coking coal and coke down 2 per cent and 2.6 per cent, respectively.
Ferrous metals on the Shanghai Futures Exchange slumped, with rebar down 2.8 per cent, hot-rolled coil and wire rod dropped 3 per cent and 2.2 per cent, respectively. Stainless steel dipped 2.9 per cent. REUTERS
Share with us your feedback on BT's products and services
