Dalian and Singapore iron ore futures fell and posted its steepest weekly drop since mid-July, as concern grew about demand for the steelmaking ingredient in China as its economy sputters.
The most-traded January iron ore contract on China’s Dalian Commodity Exchangeended daytime trade 2 percent lower at 673.50 yuan ($98.93) a ton, after earlier touching its lowest since July 27 at 672 yuan.
On the Singapore Exchange, the most-active October contract dipped 0.3 percent to $101.40 a ton.
A heatwave in top steel producer China has brought electricity rationing, forcing some mills to halt operations.
That has added to concern about iron ore demand. Analysts have warned that demand is likely to remain weak in China because of mandatory steel output limits, a property-sector downturn and COVID-19 restrictions.
“The macro data is not ideal, the real estate drags down the economy, infrastructure construction is affected by the weather and capital supply,” Zhongzhou Futures analysts said in a note.
Latest activity data showed the Chinese economy unexpectedly slowed in July, squeezed by Beijing’s zero-COVID policy and a property crisis, before the power crunch clouded growth prospects.
“There is no upward driving force until consumption improves or new favorable policies emerge,” they added, referring to iron ore and steel prices.