Iron ore and steel futures fell on Monday, as new outbreaks of Covid-19 in China revived fears that lockdowns would dampen demand in the world’s biggest steel producer.
The most-traded iron ore contract in September on China’s Dalian Commodity Exchange ended day trading down 1.9% at 903.50 yuan ($134.17) a tonne after hitting a low. week of 886 yuan.
On the Singapore Stock Exchange, the most active July contract for the steel ingredient tumbled 2.9% to $135.70 a tonne.
Beijing has raced to contain a “fierce” outbreak of Covid-19, with millions facing mandatory testing and thousands under targeted lockdowns, after the capital recently relaxed restrictions.
A mass test was also announced in the commercial center of Shanghai after a recent two-month lockdown, while an outbreak was detected in Inner Mongolia, a major region producing metallurgical coal, which is an input to steel production.
“The new lockdowns and mass testing in Beijing, Shanghai and now Inner Mongolia – the new epicenter of China’s Covid outbreak – are the realization of the iron ore market’s worst fears,” said Atilla Widnell, managing director of Navigate. Commodities in Singapore.
Source: CNN Brasil
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