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Iron ore drops on new concerns over China lockdowns

Iron ore prices fell on Friday, with the benchmark contract on the Singapore exchange heading for a weekly loss on renewed concerns about demand for the product in China, where new Covid-19 warnings threaten to derail. the reopening of the economy and steel margins are under pressure.

The most-traded iron ore contract in September on China’s Dalian Commodities Exchange ended day trading down 1.7% at 914.50 yuan ($136.83) a tonne.

On the Singapore Stock Exchange, the most active July contract for the steel ingredient tumbled 1.9% to $139 a tonne, down 2.6% weekly.

The commercial hub of Shanghai, China, faces an unexpected round of mass Covid-19 testing this weekend following the discovery of some cases in the community, just 10 days after the lifting of a city-wide lockdown that crippled the companies.

“China remains a major source of uncertainty for global growth,” JPMorgan analysts said in a note. While the reopening of the economy led to a surge in exports from China in May, “it also increases the risk that cases will resurface.”

The price of spot iron ore in China fell by US$6 on Friday to US$142 a tonne, data from consultancy SteelHome showed.

Spot product had been trading higher this week, having reached a seven-week high on Thursday at $148 a tonne as short-term demand picked up.

China’s iron ore imports rose 3% in May from a year earlier, data showed on Thursday, after disruptions to shipments from major suppliers eased.

Source: CNN Brasil

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