Iron ore futures in Dalian fell 11% on Monday (20), within the exchange’s allowable limit for daily price changes, while Singapore contracts fell as much as 8%, as fears grew about a collapse of the steel consumption in China.
Traders worry about market fundamentals amid China’s struggle to contain the recent Covid-19 outbreaks, a slowdown in construction activity during the rainy season, a rise in steel inventories due to weak demand and weak profits from steel mills.
The most-traded iron ore contract for September delivery on the Dalian Commodities Exchange ended day trading down 11% at 746 yuan ($111.60) a tonne, the lowest since March 16.
On the Singapore Stock Exchange, the July contract for the steel ingredient dropped 8% to $110.40 a tonne.
“Steel prices have fallen to 16-month lows as inventories build up,” Westpac analysts said in a note.
This adds to downward pressure on iron ore markets stemming from lockdowns in China and idle steel producers due to falling margins, they said.
Traders who had hoped for immediate policy measures to prop up the struggling economy were disappointed as China kept its benchmark lending rates for corporate and family lending as expected on Monday.
Source: CNN Brasil
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
