Iron ore futures slide as investors watch demand in China
(Bloomberg) — Iron ore suffered losses as risk aversion in financial markets intensified and investors weighed the outlook for demand in top consumer China.
Bloomberg’s Most Read
Stocks fell along with bonds on Friday as inflation, rising borrowing costs and virus lockdowns in China depressed sentiment. The outlook for iron ore is complicated by the country’s Covid-zero goal.
At a meeting on Thursday, the Politburo reiterated its support for a lockdown-dependent approach to containing the virus. This follows President Xi Jinping’s bold pledge last week to boost infrastructure construction to save economic growth, which has come under pressure from the country’s Covid strategy.
“The meeting held yesterday mainly focused on epidemic control,” said Wei Ying, ferrous analyst at China Industrial Futures. “This indicates that the restrictions will continue for the near future, which has raised some concerns” about the impact on the economy.
Meanwhile, post-holiday demand for the steel ingredient has only increased slightly, according to a note from Holly Futures. Virus-related lockdowns have slowed the movement of iron ore shipments, while overall market demand faces great uncertainty due to the spread of Covid in China, he said.
Singapore futures fell 2.8% to $141.50 a tonne, after closing up 1.7% on Thursday at 11:56 a.m. local time. Dalian futures fell 1.6%. Steel rebar and hot rolled coil declined in Shanghai.
Bloomberg Businessweek’s Most Read
©2022 Bloomberg LP