Chinese iron ore and steel futures fell on Wednesday after a two-day rally, as traders were cautious about the risks from COVID-19 curbs that have clouded economic growth prospects in the world’s biggest steel producer.
The most-traded September iron ore on China’s Dalian Commodity Exchange ended the morning trade 2.9 percent lower at 811 yuan ($120.15) a ton, after hitting its highest since May 6 on Tuesday at 849 yuan.
On the Singapore Exchange, the steelmaking ingredient’s June contract was down 1.4 percent at $126.30 a ton, as of 0358 GMT.
Analysts say China’s slowing economy will struggle to stage the kind of stunning recovery it achieved from the early depths of the pandemic two years ago, as its formidable export machine teeters and options to revive investment and consumption dwindle.
Mirroring the souring sentiment, foreign investors cut their holdings of Chinese yuan-denominated bonds for the third consecutive month in April.
Economic indicators point to an economy struggling from COVID-19 lockdowns, with new home prices in April falling for the first time since December.
Some analysts say there is still no end in sight for China’s COVID-19 challenges, despite an improving situation in Shanghai that supports the easing of restrictions. – Reuters
