Global iron ore prices dipped for a second day on Wednesday after futures prices in China and Singapore saw another day of big falls.
At the same time, data from the World Steel Association revealed a strong, 6.6% annual jump in output as global demand recovered from COVID in and outside China.
But the growing second and third waves of infection this month in Europe, the US, parts of Asia and Africa threatens that recovery in demand.
The metal Bulletin’s Fastmarkets said that seaborne iron prices fell in response to the slide in futures and rising rebar (reinforcing bar, used in construction) inventories in northern China.
Rising stocks of unused rebar would indicate a fall in construction sector demand – though that could be normal at this time of year because of winter conditions usually sees a fall in building activity because of hard ground and subzero temperatures.
The price of 62% Fe fines delivered to northern China dipped by $US2.50 to $US162.03 a tonne, according to Fastmarkets (The price peaked at $US176 a tonne on Monday). The price of 65% fines ex Brazil dipped $US2.50 as well to $US175.70 a tonne, down from the $US190 a tonne peak on Monday.
Chinese iron ore futures slumped by more than 9% on Wednesday, with the Dalian benchmark falling back below 1,000 yuan more than a week after breaking through that level.
The fall on Tuesday and Wednesday followed changes in trading rules and concerns about a new COVID-19 strain in Europe and Africa spreading globally.
The Dalian futures market is cutting some trading position limits by more than half for its iron ore futures, the world’s most liquid.
Reuters reported that the most-traded May contract on the Dalian Commodity Exchange fell as much as 9.1% to 990.50 yuan ($US151.22) a tonne on Wednesday, after it hit a contract high of 1,147 yuan on Monday.
On the Singapore Exchange the January contract slumped 5% to $US156.01 a tonne.
Reuters said that construction steel rebar on the Shanghai Futures Exchange and hot-rolled steel coil dropped as much as 5%, while stainless steel slid 4.1%.
