China’s iron ore futures retreated from a 10-session rally, on fears that the fast-spreading coronavirus that has disrupted international trade could lead to a pandemic and further hurt the global economy.
The worsening health crisis, with the death toll still rising in China and other Asian economies, could further dampen global demand for the steelmaking raw material and steel products.
In China, which produces half of the world’s steel supply, steel product stockpiles have dramatically built up after the epidemic had stalled many construction projects and kept factories shut for weeks. Work resumption, however, has accelerated this week.
Iron ore on the Dalian Commodity Exchange fell as much as 3 percent to 656 yuan ($93.37) a ton, before ending the morning trade down 1.6 percent, while the most-active futures contract on the Singapore Exchange slumped 2.1 percent to $87.18.
Dalian iron ore, until Monday, had risen 16.6 percent in its longest rally since June 2016, defying the weakness seen in industrial metals as punters focused on tightening supplies of the raw material from Australia and Brazil, and Beijing’s pledge to step up policy support for the jolted economy. – Reuters