Iron ore tumbled on the Dalian Stock Exchange on Wednesday, marking its third consecutive monthly decline, after a survey showing a contraction in factory activity in China raised doubts about an economic recovery in the world’s biggest steel producer and consumer. world.
Top-traded iron ore for January delivery on China’s Dalian Commodity Exchange extended its losses for a third session, ending trading down 1.7% at 685 yuan ($99.35) a tonne.
On the Singapore Stock Exchange, the most active October contract for the steel ingredient reversed early losses, rising 1% to $98.30 a tonne. On a monthly basis, there was also a loss.
China’s manufacturing activity extended the decline in August, with new Covid-19 infections, the worst heatwaves in decades and a troubled housing sector weighing on output, a survey showed.
“China’s economic weakness is becoming increasingly demand-driven. Consumer and investment sentiment among households and businesses is weak, increasing the risk of a deflationary spiral,” said Raymond Yeung, ANZ’s chief economist for Greater China.
New outbreaks of Covid-19
in China, fears of more lockdowns in the world’s biggest consumer of iron ore are heightening ahead of the 20th Congress of the Communist Party, which begins on 16 October.
The bearish outlook for steel demand in China in the medium term also weighed heavily on other steel inputs, with metallurgical coal and coke falling 2.4%, also for the third consecutive session.
Source: CNN Brasil
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