Home / Commodities / Commodity News / Iron ore tumbles to 2-month low on concerns over weakening China demand

Iron ore tumbles to 2-month low on concerns over weakening China demand

Iron ore futures fell to a two-month low on Tuesday, weighed down by lingering weak fundamentals and concerns over demand prospects in top consumer China following the latest carbon emission plan for the steel sector.

The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 4.16% lower at 806 yuan ($111.12) a metric ton, the lowest since April 10. The Chinese futures market was closed on Monday for the Dragon Boat Festival.

The benchmark July iron ore on the Singapore Exchange fell 1.57% to $103.75 a ton, as of 0708 GMT, the lowest since April 8.

Iron ore supply has risen while demand has softened and showed little room for improvement, analysts at Sinosteel Futures said in a note, adding that high portside inventory weighed on the market.

Hot metal output will have to be reduced by 46 million tons in 2024 if steelmakers were to enforce the carbon emission plan stringently, analysts at Jinrui Futures said in a note, forecasting daily hot metal output at 2.27 million tons from June to December.

China’s state planner issued last Friday a special action plan on conserving energy and reducing emissions of carbon dioxide (CO2) in the steel sector. It aims to reduce CO2 emissions by about 53 million tons between 2024 and 2025.

Ore prices were also pressured by the scepticism about the effect of various property stimulus on real steel demand.

China’s efforts to clear massive inventory by turning unsold homes into affordable housing are unlikely to help cash-strapped developers due to the programme’s limited size and potentially low prices, analysts and developers say.

Other steelmaking ingredients on the DCE fell, with coking coal DJMcv1 and coke DCJcv1 down 2.7% and 2.85%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were weaker. Rebar SRBcv1 shed 1.77%, hot-rolled coil SHHCcv1 fell 1.62%, wire rod SWRcv1 retreated 1.44% and stainless steel SHSScv1 lost 1.16%.
Source: Reuters (Reporting by Amy Lv and Mei Mei Chu; Editing by Subhranshu Sahu)

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping
error: Content is protected !!