Dalian iron ore prices down

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Dalian iron ore fell on Friday and posted its first weekly drop in two months, as worries about demand weakness in top steel producer China outweighed supply risks flagged by the world’s biggest miners.

The most-traded September iron ore on China’s Dalian Commodity Exchange dropped 2.4 percent to 881 yuan ($136.16) a ton, after touching 876 yuan earlier in the session, its lowest since April 14. It had fallen 2.6 percent this week.

On the Singapore Exchange, the most-active May iron ore contract rose 0.4 percent to $151.80 a ton, but was also on track for a weekly loss.

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Spot iron ore in China had fallen 2.9 percent this week to $152 a ton, as of Thursday, SteelHome consultancy data showed.

China has vowed to continue curbing steel output this year, in line with its goal to reduce carbon emissions.

Demand outlook was also clouded by the risk of recurring COVID-19 outbreaks in China, especially in steel production hubs. Several districts in Tangshan city have been placed again under lockdown this week.

But “slowing iron ore production as reflected in major producers’ production reports should protect the downside for the market,” ANZ commodity strategists said in a note.

BHP Group has warned of continuing lower iron ore production after its March quarter output fell short of estimates, while Rio Tinto reported lower-than-expected first-quarter shipments and Vale SA posted a 6 percent drop in first-quarter output.

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