Iron Ore Drops As Covid Cases Rebound In Major Chinese Cities 10/06/22

Iron Ore Drops Below $140 With China Virus Fears Resurfacing

 

Iron ore fell for a second straight day in Singapore on signs China’s exit from virus restrictions is
likely to be far from smooth. The steel-making ingredient dipped below $140 a ton after Shanghai said it will lock down eight districts this weekend to mass test millions of people as cases continue to emerge. In Beijing, some entertainment venues were closed to contain the spread of Covid-19, according to media reports. Iron ore has rallied around 17% since mid-May on expectations the economy will bounce back quickly as China gets past its latest virus outbreaks. The renewed curbs are a reminder that as long as Beijing maintains its strict Covid Zero policy, restrictions can return at any time, making the deployment of planned infrastructure spending more difficult. Chinese steel mills are still facing headwinds, which is also damping demand.

Iron ore fell 1.4% to $139.80 a ton as of 11:24 a.m. in Singapore after closing down 2.1% on Thursday. It’s down 2% this week. Futures in Dalian declined 0.3%, while steel rebar and hot-rolled coil were little changed in Shanghai.

 

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