Iron Ore Prices Plunge as China's Reopening-Fueled Rally Fades Away
- 03-Feb-2023 12:25 PM
- Journalist: Francis Stokes
China: Iron ore and Steel prices in China skyrocketed to multi-month heights in January, thanks to Beijing’s stronger policy support for its struggling property sector and the easing of strict COVID-19 restrictions. The markets experienced a rally since early November, which created an environment of economic growth and optimism.
Iron ore prices were stable on Thursday as traders evaluated demand forecasts in major consumer China. Prices remain bolstered by anticipations of more policy stimulus measures from Beijing to drive economic recovery. In January, Iron ore and Steel prices in China reached multi-month highs due to Beijing's intensified support for its property sector, together with the relaxation of COVID-19 restrictions.
Steelmaking ingredient prices have seen a remarkable rise on the Singapore Exchange, climbing more than 9% this year.
Iron ore prices weakened on Monday, slipping 0.4% to close at 867 yuan ($129.17) a tonne on China's Dalian Commodity Exchange. Despite this, other commodities such as rebar and hot-rolled coil remained relatively steady, while wire rod fell 0.2%. In addition, Stainless Steel dropped 2.5%, although analysts have stated that underlying demand-side support for Iron ore is yet to be verified.
China's state planner recently cautioned against the risk of surging speculation in the country's Iron ore prices, emphasizing the need for increased supervision of spot and futures markets to keep rising commodity inflation in check.