Iron ore price slumps on covid-19 restrictions in China

Port of Qinqdao, China. Stock image.

The iron ore price fell on Monday, tracking lower raw material prices as still stringent covid-19 related measures in China dented market sentiment and fuelled worries that the recovery in the world’s second-largest economy might lose steam.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $150.65 a tonne during morning trading, down 2.23% compared to Friday’s closing.

Iron ore price

“Previous market expectation was that the (steel) demand would be postponed but not absent,” analysts with GF Futures wrote in a note.

“But as the current pandemic is continuously spilling over, there’s a relatively big uncertainty in its disruptions to the economy,” said the note, adding that the consumption in April and May could be pressured.

China’s financial hub, Shanghai, which had started lockdown at the end of March, has reported around 180,000 locally transmitted infections between March 1 and April 9, of which 96% were asymptomatic.

“China’s covid outbreaks, associated lockdowns, and the government’s handling of them will likely continue to dominate sentiment and direction for iron ore futures in the near term,” said Atilla Widnell, managing director at Navigate Commodities in Singapore.

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(With files from Reuters)