Iron ore price extends decline on China lockdown fears

The iron ore price fell on Monday as fresh covid-19 outbreaks in China revived fears of lockdowns, dampening demand in the world’s top steel producer.

Benchmark 62% Fe fines imported into Northern China fell 3.77% Monday morning, to $135.87 per tonne.

The most-traded September iron ore contract on China’s Dalian Commodity Exchange ended daytime trading 1.9% lower at 903.50 yuan ($134.17) a tonne, after earlier touching a two-week low of 886 yuan.

Beijing raced to contain a “ferocious” outbreak, with millions facing mandatory testing and thousands under targeted lockdowns, after the capital city recently relaxed curbs.

A mass testing was also announced in the Shanghai commercial hub, following a recent two-month lockdown, while an outbreak was detected in Inner Mongolia, a major producer of metallurgical coal that is also used in steel production.

Recent lockdowns in China, which has a zero-covid policy, have sharply slowed economic activity, adding to a grim global outlook amid the fallout from the war in Ukraine and a worldwide monetary policy tightening to curb inflation.