The futures contracts iron ore fell to two-week lows on Thursday as traders re-evaluated demand prospects in Chinaan important consumer of the product, despite expectations of more stimuli to support the country’s economic recovery.
The prices of iron ore and steel in China hit multi-month highs in January, with markets rallying since early November on the back of Beijing’s increased support for the struggling real estate sector and the dismantling of tight restrictions on Covid-19.
The steel ingredient is up more than 9% this year on the Singapore Exchange, while steel benchmarks in China, the world’s biggest producer of the material used in construction and manufacturing, have also posted monthly gains since November.
Steel prices are “acting strongly on cost support and positive expectations,” analysts at Huatai Futures said in a note.
But analysts say demand-side support for iron ore needs to be proven.
China’s imports and exports are facing an “extremely severe” environment due to rising risks of a global recession and slowing external demand, a government official said on Thursday.
The most traded iron ore for May on China’s Dalian Commodity Exchange ended day trading down 3.3% to RMB 841.50 ($125.29) a tonne. Earlier, it hit 839 yuan, the weakest since Jan. 18.
The benchmark iron ore contract in Singapore fell as much as 3.8% to $121.20 a tonne.
Source: Moneytimes
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