The iron ore price fell below
$100 a tonne for the first time in over five weeks on signs that the crisis in
China’s steel industry is worsening.
According to Fastmarkets MB,
benchmark 62% Fe fines imported into Northern China were changing hands for
$98.63 a tonne Tuesday morning, down 3%.
The most-traded January iron ore
contract on China’s Dalian Commodity Exchange ended daytime trade 5% lower
at 682 yuan ($98.57) a tonne, having touched a one-week low of 680.50 yuan
earlier in the session.
Steel prices also stretched
losses after several Chinese cities, including Shenzhen and Dalian, escalated
covid-19 restrictions to contain outbreaks.
Steel production in the key
center of Tangshan will fall by more than 8 million tonnes in the second half
due to plans to restrict output, Minmetals Futures said in a note on Tuesday. The hub produced about
75 million tonnes in the first six months, according to Mysteel.
Authorities in Tangshan, near
Beijing, decided to cut production at a recent meeting, Mysteel said in a report last week.
Major mill Angang Steel Co. has said it sees tough conditions persisting
through the end of the year.
Chinese banks are
facing losses as mortgage boycotts sweep the property sector, which
is crucial to steel demand.
“A lack of growth in construction
activity will keep steel demand weak in the short term,” analysts including
Daniel Hynes at Australia & New Zealand Banking Group wrote in a note.
Mining.com