Iron ore price drops below $100 as worries over China demand grow
The iron ore price fell on Wednesday, languishing below $100 a tonne, as steel prices slumped in China.
A weaker yuan added to the gloomy mood, with Shanghai rebar futures hitting their lowest in more than six months.
Benchmark 62% Fe fines imported into Northern China fell 3.22%, to $97.83 per tonne, the lowest since November.
The most-traded September iron ore on China’s Dalian Commodity Exchange ended daytime trading 4.6% lower at 682.50 yuan ($98.74) a tonne, touching its lowest since May 5 at 682 yuan.
China’s yuan surrendered all the gains it made this year against a basket of currencies of its trading partners amid fresh tensions in Sino-US relations.
The currency’s weakness added to lingering concerns about top steel producer and metals consumer China’s patchy economic recovery, Sinosteel Futures analysts said in a note.
China’s steel demand — which did not meet expectations for the peak construction season between March and May — is likely to remain muted, and as steel mills comply with China’s production limits to curb emissions.
“In the medium term, the crude steel production control policy will lead to a significant drop in iron ore demand, while the long-term outlook is also relatively pessimistic,” Sinosteel analysts said.