Iron ore price fell on Thursday, with the Dalian benchmark hitting a three-week low, as hopes faded for China to relax its stringent zero-covid policy.
Signals that Beijing will stick with its strict measures to control outbreaks after a pivotal Communist Party congress beginning Oct. 16 weighed on futures markets.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $94.86 a tonne Thursday morning, down 1.19%.
The most-traded January iron ore on China’s Dalian Commodity Exchange ended daytime trade 2.5% lower at 696 yuan ($96.79) a tonne, after hitting its lowest since Sept. 22 at 695 yuan earlier in the session.
Ahead of the party meeting, the world’s top steel producer ramped up COVID testing, extended quarantine times, and closed some public spaces, as infections rose.
In top steel-producing Hebei province, mills were asked to cut sintering operations by up to 50% to improve air quality during the meeting.
“We should not be overly pessimistic about finished products,” Huatai Futures analysts said in a note, pointing out that reduced steel production could eventually help prop up prices.
“In the short term, we will be dominated by macroeconomic factors and increased uncertainties…(but will) maintain a relatively neutral view,” they said.
(With files from Reuters)