The iron ore price
fell below $100 a tonne for the first time in over five weeks on signs that the
crisis in China’s steel industry is worsening.
According to Fastmarkets MB,
benchmark 62% Fe fines imported into Northern China were changing hands for
$98.63 a tonne Tuesday morning, down 3%.
The
most-traded January iron ore contract on China’s Dalian Commodity
Exchange ended daytime trade 5% lower at 682 yuan ($98.57) a tonne, having
touched a one-week low of 680.50 yuan earlier in the session.
Steel
prices also stretched losses after several Chinese cities, including Shenzhen
and Dalian, escalated covid-19 restrictions to contain outbreaks.
Steel
production in the key center of Tangshan will fall by more than 8 million
tonnes in the second half due to plans to restrict output, Minmetals Futures
said in a note on Tuesday. The hub produced about
75 million tonnes in the first six months, according to Mysteel.
Authorities in Tangshan, near
Beijing, decided to cut production at a recent meeting, Mysteel said in a report last week. Major mill Angang Steel
Co. has said it sees tough conditions persisting through the end of the year.
Chinese
banks are facing losses as mortgage boycotts sweep the property
sector, which is crucial to steel demand.