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Dalian iron ore dropped more than 9% on Monday to a one-month low, as a broad-based decline in global markets and concerns over steel demand in China dragged down prices.
The most-traded iron ore on China’s Dalian Commodity Exchange dropped 9.4% to 806.5 yuan a tonne, as of 0301 GMT, after touching its lowest since late-March earlier in the session. The most-active rebar contract on the Shanghai Futures Exchange SRBcv1 lost 3.4% and hot-rolled coil SHHCcv1 lost 4%.
“There is a bit of a negative feedback loop across global economies,” said Stephen Innes, managing partner at SPI Asset Management.
The iron ore market is likely reading more yuan weakness, which increase import costs; and no PBoC (People’s Bank of China) stimulus meaning no housing recovery — those are two gusty headwinds, Innes said, adding that iron ore is catching a downdraft to other commodities.
Asian stocks fell the most in two weeks as concern about rapid U.S. rate rises and slowing growth rattled investors, while the euro found support after Emmanuel Macron won a second term as French president.
Coking coal 4.7% and coke gave up 5.4%.
China has vowed to continue curbing steel output this year, in line with its goal to reduce carbon emissions.
Demand outlook was also clouded by the risk of recurring COVID-19 outbreaks in China, especially in steel production hubs. Several districts in Tangshan city have been placed again under lockdown this week.