Iron Ore Extends Losses as Shanghai Outbreak Spurs Demand Fears
Iron ore dropped again after a weekly decline as new virus flare-ups in China hurt the demand outlook.
Prices of the steel-making material have plunged by about a third in the past four months in Singapore. They are under renewed pressure after Covid-19 cases in Shanghai climbed to the most since late May, while parts of the China’s financial hub face more rounds of mass testing.
In a sign of weaker consumption, port stockpiles rose for the second week, and some steel mills have already pledged to cut output.
“The pandemic is still a big disruptive factor in the near term,” Huatai Futures wrote in a note. “The domestic steel-cuts policy that’s gradually becoming more clear and the significant decline in mill margins in the short term will both restrain iron ore consumption.”
Iron ore dropped 2.4% to $110.20 a ton in Singapore as of 9:39 a.m., following a 1.5% decline last week. Futures in Dalian fell 3.5%, while steel contracts in Shanghai tumbled by more than 4%.
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