NGLOY - Iron ore adds to losses on China demand concerns; banks warn of further drop

2023-03-22 07:30:18 ET

Iron ore futures extended losses Wednesday, as the demand outlook is weighed by the possibility that China would reduce its crude steel production by as much as 2.5%.

The target was proposed by policymakers at a meeting last week but has not been finalized, Reuters reports.

The most-traded May iron ore futures contract ( SCO:COM ) on the Dalian Commodity Exchange ended daytime trading -2.1% lower at 865.5 yuan/metric ton ($125.64), and benchmark April iron ore on the Singapore Exchange recently -2.2% at $120.7/ton, both prices the lowest since mid-February.

Potentially relevant companies include BHP ( BHP ), Rio Tinto ( RIO ), Vale ( VALE ), Fortescue ( OTCQX:FSUMF ), Glencore ( OTCPK:GLCNF ) ( OTCPK:GLNCY ) and Anglo American ( OTCQX:AAUKF ) ( OTCQX:NGLOY ).

Commonwealth Bank of Australia said it now sees iron ore dropping to ~$100/ton by Q4 as China's steel demand slows, following a similarly bearish outlook from Australia & New Zealand Banking Group.

China has been signaling its unease at high iron ore prices in recent weeks with a series of blunt warnings .

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