The Saldanha Bay iron-ore export terminal in South Africa
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 hit $82.45 a ton in Singapore on Thursday, its lowest since May 2020. Prices have fallen more than 50% from a peak in March.
Iron ore has been under pressure as consumption weakens in China because of the nation’s housing market woes and Covid restrictions. Demand worldwide is also fading as tighter monetary policy and Europe’s energy crisis roils major economies.
“A bleak economic outlook and challenges in China’s property market do not bode well for bulk commodities,” Australia & New Zealand Banking Group said in a note.
Hopes that the recently concluded Communist Party congress would bring an easing of President Xi Jinping’s flagship policy to rein in real-estate debt have faded. The nation’s steel inventories are again expanding, while its winter output curbs and Europe’s energy crisis are weighing on production.
Investors are also watching for signs of increasing supplies. Australia’s Fortescue Metals Group reported record-high exports for its fiscal first quarter. Meanwhile, Brazil’s Vale is expected to report earnings later on Thursday.
Iron ore in Singapore fell to $82.5 a ton as of 3:33 p.m. local time after tumbling as much as 4.7% to $82.45. Dalian futures closed 2.9% lower while steel rebar and hot-rolled coil futures both retreated in Shanghai.