Iron ore price down on growing fears of weak demand in China

The iron ore price fell on Monday on growing fears of weakening demand for the raw material in China.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $113.68 a tonne, down 0.55%.

The most-traded iron ore contract for September delivery, on China’s Dalian Commodity Exchange ended daytime trade 3.3% lower at 741 yuan ($110.37) a tonne, after earlier touching 722 yuan, its lowest since July 6.

Local governments in China, which are maintaining a dynamic zero-covid policy, are adopting fresh curbs — from business halts to lockdowns to rein in new infections, with the commercial hub of Shanghai bracing for more mass testing.

“Relentlessly negative covid headlines out of Gansu, Guangdong, Henan, Macau, Shanghai and Zhejiang over the weekend will pour ice-cold water over sentiment from Monday onwards,” said Atilla Widnell, managing director at Navigate Commodities in Singapore.

Increased iron ore shipments to China from top suppliers Australia and Brazil are also adding to the negative mood, he said.

Demand for iron ore, meanwhile, is expected to remain weak as Chinese steel mills scale back output while nursing losses from high inventories and sluggish steel orders.