Despite evidence of a recovery in industrial activity in China, the world's largest consumer of metals, iron-ore and steel prices fell on Friday as worries of a decline in demand for commodities were stoked by the potential for a harsh global economic downturn.
The threat of a worldwide recession made the demand prognosis for iron ore in China, the world's largest steel manufacturer, even more gloomy. Recently, mills there have shut down dozens of blast furnaces in an effort to lower excessive stockpiles due to weak orders.
On China's Dalian Commodity Exchange, the most actively traded September contract for iron ore finished daytime trading 6.9 percent down at 747.50 yuan (USD 111.5) a ton. This prolonged losses for a second day.
The front-month August contract for the steelmaking component was down 4.3 percent at USD 113.90 a ton on the Singapore Exchange.
The benchmark 62 percent-grade material lost its gains for 2022 on the spot market on Thursday when it dropped 2 dollars to USD 122 a ton. On Friday, the price of spot iron ore decreased even further, to 117 per ton.
Steel output is being pressured globally, according to Warren Patterson, director of ING's commodities strategy. "The outlook for global steel demand is plainly not good, with expectations of slowing economic growth and the rising possibility of recession."
The materials and information on this article have been prepared or assembled by Viet Nam Steel and are intended for informational purposes only.
