Iron ore price lowest in 11 months as China’s peak construction season disappoints

Construction site in China (Stock Image)

Iron ore prices slumped on Tuesday as China’s steel demand season draws to an end with a disappointing outcome.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $89.36 a tonne Tuesday morning, down 2.3%, the lowest since November 2021.

The most-traded January iron ore contract on China’s Dalian Commodity Exchange ended daytime trade 1.9% lower at 669.50 yuan ($91.64) a tonne, after touching its weakest since September 2 at 662.50 yuan.

“The peak season is coming to an end. The previously expected demand recovery did not meet expectations, let alone exceed expectations,” Huatai Futures analysts said in a note.

“The market’s confidence in steel prices has weakened.”

Uninspiring Chinese economic data and a sliding Chinese yuan added to the bearish mood prevailing after the Chinese Communist Party Congress.

“The Party Congress outcomes suggest little chance of a near-term change in policy,” said National Australia Bank economist Taylor Nugent, citing China’s zero-covid policy and a top governing body stacked with President Xi Jinping’s loyalists.

(With files from Reuters)