Dalian iron ore futures fell to their lowest level in 16 weeks on Wednesday, while a sell-off resumed in Singapore, amid rising concerns about oversupply of iron ore. steel in China.
The September iron ore contract on China’s Dalian Commodities Exchange ended day trading down 6% at 709.50 yuan ($105.57) a tonne, extending losses into a ninth straight session.
Earlier in the day, the contract dropped to 698.50 yuan, the lowest since March 1.
The July contract on the Singapore Stock Exchange fell 5.6% to $108.45 a tonne after the previous session showed a rebound from an eight-session sell-off.
On the spot market, reference material with 62% iron content bound for China was traded at US$112.50 a tonne, US$5 lower than recorded on Tuesday, based on data from SteelHome consultancy.
“Markets are particularly concerned that demand growth expectations linked to China’s pledge to increase infrastructure investment may not materialize, especially with the country’s zero Covid policy still in place,” said the Commonwealth Bank of England analyst. Australia, Vivek Dhar.
Interruptions in construction activity caused by heavy rains in some parts of China have also led to a build-up of steel inventories, prompting steelmakers to shut down blast furnaces to reduce losses.
Source: CNN Brasil
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