Iron ore prices fell more than 7 percent today to their lowest levels since the beginning of 2019, as the unexpected decline in factory activity in China in October caused a gloomy outlook.
Iron ore declines sharply after bad factory activity data in China. Prices are heading for their worst monthly decline in more than a year.
Iron ore for January delivery on the Dalian Commodity Exchange closed 3.2 percent at 612 yuan/t ($84.27) in the morning after falling to 604.50 yuan/t, the lowest level since July 22, at the start of the session.
The price on the Singapore Stock Exchange fell 7.1 percent to $75 a tonne today, the lowest level since January 2019. The price later rallied to $79.50.
Iron ore in Dalian has fallen more than 30 percent so far from its June peak of 890 yuan/t, while iron ore in Singapore has dropped more than 50 percent from its April high of $160/t.
Analysts said that the more quickly the marginally high-cost iron ore suppliers respond to lower prices and reduce shipments, the higher the prices could rise.
The negative effects of the real estate crisis in China and the zero-Kovid policy on the construction sector are causing pressure on prices. Prices have been falling since last week’s Communist Party Congress in China.
Rebar on the Shanghai Futures Exchange fell 2.3 percent, hot rolled coil 1.8 percent, wire rod 1.5 percent and stainless steel 2 percent.