Iron ore futures tumbled on Friday, with the steelmaking ingredient sinking below $80 per tonne in Singapore and leading a ferrous market rout in China spurred by a gloomy outlook for global steel demand and supply-side pressures.
The most-traded November iron ore on the Singapore Exchange SZZFX2 fell as much as 3.6% to $78.80 a tonne, the lowest since 2020. It was down 2.2% at $79.90, as of 0801 GMT, and has fallen more than 50% from its April peak above $160.
On China’s Dalian Commodity Exchange, the most-active January contract DCIOcv1 ended daytime trade 4.9% lower at 624.50 yuan ($86.31) a tonne, on track for its third consecutive weekly fall.
Spot iron ore, meanwhile, tumbled this week to the lowest since May 2020 below $90 a tonne SH-CCN-IRNOR62, as negative margins prompted Chinese steel mills to rein in output.
The International Monetary Fund said it does not expect a speedy resolution to the property turmoil in China.
Fresh COVID-19 lockdowns in China, expectations of further U.S. interest rate hikes, and signs of increasing iron ore supply also added pressure on prices.
Australia’s Fortescue Metals Group FMG.AX reported a 4.2% year-on-year rise in quarterly shipments, while Brazil’s Vale SA’s VALE3.SA quarterly output grew 1.1%.
“Weakness in the Chinese property market remains a headwind for steel and iron ore,” ANZ commodity strategists said in a note. “Supply-side issues have also weighed on the market.”
Other steelmaking inputs also extended losses, with Dalian coking coal DJMcv1 and coke DCJcv1 down 2% and 2.6%, respectively.
Ferrous metals on the Shanghai Futures Exchange slumped, with rebar SRBcv1 down 2.8%, hot-rolled coil SHHCcv1 and wire rod SWRcv1 dropped 3% and 2.2%, respectively. Stainless steel SHSScv1 dipped 2.9%.
