Dalian and Singapore iron ore futures fell on Tuesday as traders curbed optimism about China demand prospects in 2023, locking in some of the recent gains while top steel producer China grapples with spreading COVID-19 infections.
Chinese steel benchmarks also retreated as investors across asset class awaited the US inflation report, due later in the day, and policy signals from the Federal Reserve the next day.
The most-traded iron ore for May delivery on China’s Dalian Commodity Exchange shed as much as 2.5 percent to 790 yuan ($113.17) a ton in early trade.
On the Singapore Exchange, the steelmaking ingredient’s benchmark January contract slumped 2.4 percent to $106.85 a ton.
“The worsening health and current economic news is now pushing back somewhat against the exuberance evident in the past few weeks on the evidence of China beating the retreat on its hitherto zero-COVID stance,” said Ray Attrill, head of FX strategy within the fixed income, currencies and commodities division of National Australia Bank.
