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Iron ore price falls on China covid woes, recession fears

Iron ore shipments at the port of Qingdao. (Image courtesy of China’s Port of Qingdao Authority)

The iron ore price fell on Wednesday amid a fresh wave of covid-19 infections in China.

Daily cases of locally transmitted infections in mainland China increased to more than 300 over the weekend, compared with a few dozen in late June.

“As we have repeatedly said, tighter covid measures could return to China. And there are more positive covid tests once more in Shanghai,” ING economists said in a note.

Benchmark 62% Fe fines imported into Northern China fell 1.27%, to $111.54 per tonne.

“China’s sluggish economic growth and particularly weak steel production suggest that the iron ore price could slide towards $100 per tonne,” senior economist at MLC Asset Management Bob Cunneen told Financial Review in an interview.

Goldman Sachs reduced its three-month price target for the bulk commodity to $90 per tonne, from $110 a tonne.

The bank expects the metal price to average $100 per tonne in Q2 2022.

(With files from Reuters)