Iron ore futures on the Dalian and Singapore exchanges fell on Monday, hampered by a bleak outlook for demand for the steel ingredient in China, where many steelmakers are suffering losses and cutting production.
The most-traded iron ore contract for September on China’s Dalian Commodities Exchange ended trading down 5.8% at 719.50 yuan ($107.49) a tonne, extending losses to a third. session and reaching its lowest level since June 23.
On the Singapore Stock Exchange, the contract for August fell 4.8% to $109.15 a tonne.
Mills in China, the world’s biggest steel producer, have grounded dozens of blast furnaces as inventories piled up after weakening domestic demand, hit by Covid-19 lockdowns and bad weather.
The growing prospect of a global recession also weighed on market sentiment, along with China’s move to reduce steel production under its decarbonization plan.
“We expect iron ore futures to trade lower this week due to these heavily negative pricing factors,” said Atilla Widnell, managing director of Navigate Commodities in Singapore.
Cities in eastern China tightened Covid-19 restrictions on Sunday as clusters of coronavirus cases emerge, posing a new threat to China’s economic recovery under the government’s strict Covid-zero policy.
Source: CNN Brasil
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