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China’s iron ore futures continue to slide on Friday amid market concerns over sluggish demand. The most-traded contract on the Dalian Commodity Exchange, for January 2023 delivery, is sliding more than 4.5% to hit 627 yuan per tonne, the lowest level in more than three months. The contract tumbled 4.1% one day earlier.
Dalian iron ore has tumbled about 30% from a June peak of 890 yuan, while benchmark 62%-grade iron ore’s spot price for the China-bound material sank to an 11-month low of $92 on Wednesday, SteelHome consultancy data showed.
Steel futures are also trading lower on Friday, with the most active contract of hot-rolled coil and steel-rebar on the Shanghai Futures Exchange, for January 2023 delivery, falling by 3% and 2.7%, respectively. Coking coal and coke are falling by nearly 2%
Overseas, iron ore extended its rout to the lowest level in more than two years on mounting concerns over global steel demand. The steel-making ingredient falls more than 2% to drop below $80 a tonne in Singapore on Friday, hitting its lowest since May 2020. Prices have fallen more than 50% from a peak in March.
The falls came amid increasing market concerns over steel demand, in particular in China. Profits at China’s industrial firms fell 2.3% in January-September from a year earlier, dropping at a faster clip, as COVID-19 curbs and a property slump dampened factory activity. Read more …
Several Chinese cities are doubling down on COVID-19 curbs, sealing up buildings and locking down districts to halt widening outbreaks. Read more …
China’s property sector woes also persist. “Despite a gradual and mild improvement in property sales data, we do not think investors’ confidence will pick up anytime soon,” J.P.Morgan analysts said in a note.
“Expectation for stronger/nationwide easing is muted, as there is no change in policy narrative after the National Congress, home price remains weak, (and) investors’ confidence on developers’ liquidity remains low.”
“A bleak economic outlook and challenges in China’s property market do not bode well for bulk commodities,” Australia & New Zealand Banking Group Ltd. said in a note.
“The peak season is coming to an end. The previously expected demand recovery did not meet expectations, let alone exceed expectations,” Huatai Futures analysts said in a note.
