Iron ore futures on China’s Dalian Commodity Exchange took a sharp dive Tuesday, marking their most significant drop in nearly two years.
Disheartening economic data from China led to this decline, overshadowing the demand outlook. Meanwhile, strong global supply continued to suppress prices.
On that day, the most traded January contract fell by 4.74% to close at 703.5 yuan (about $98.87) per ton.
This was the steepest decrease since October 31, 2022. During the session, prices briefly reached 700 yuan, hitting their lowest point since August 19.
The downturn affects stocks of Brazilian mining and steel companies. For instance, Vale’s ADRs were trading nearly 3% lower in early trading in New York.
Falling iron ore prices stem from weak demand in China, exacerbated by a continuous decline in manufacturing.
Analysts from ANZ highlighted this issue, noting the industrial slowdown. China’s manufacturing activity dropped to a six-month low in August, pushing policymakers to consider more supportive measures.
In real estate, the rise in new home prices in August was modest, underscoring a sluggish recovery despite governmental support.
