Dalian and Singapore iron ore futures fell on Thursday, hit by worries about COVID-19 curbs in China, but Beijing’s assurance that there is still policy space to cope with challenges facing the world’s top steel producer calmed traders.
Iron ore’s most-traded September contract on China’s Dalian Commodity Exchange dropped as much as 4.8 percent to 777 yuan ($114.94) a ton, before the sell-off eased.
On the Singapore Exchange, the steelmaking ingredient’s most-active June contract was down 0.3 percent at $124.80 a ton, after earlier tumbling as much as 4.3 percent to $119.80.
China’s tough “zero-COVID” policy could mean lockdowns will continue as more COVID clusters are found, which also means disruptions to steel mills’ operations and supply chains.
“Shanghai is poised to start a very gradual unwinding of its two-month lockdown amid a fall in COVID-19 cases. That confidence could quickly evaporate if rising cases in Beijing lead to further restrictions there,” said Daniel Hynes, senior commodity strategist at ANZ.
Some districts of Beijing and Tianjin remained under lockdown, and more may be put in isolation, analysts at ING said in a note. — Reuters
