Iron ore prices rose on Wednesday, pressured by concerns about demand prospects for the steelmaking raw material in top steel producer China.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $218.66 a tonne on Wednesday, up 0.1% from Tuesday’s closing.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange ended daytime trade 0.8% higher at 1,219.50 yuan ($188.36) a tonne.
“There are early signs of a turning point in Chinese demand with falling Chinese steel prices crushing margins for steel mills,” said Justin Smirk, a senior economist at Westpac in Sydney.
Declining cement prices in China, some rebar makers possibly starting to incur losses, and excavator sales in May posting the first monthly drop since early 2020 point to slowing construction activity that has also been hampered by an unfavourable weather, Smirk said.
China’s steel exports also remained weak, hit by tepid demand in Southeast Asian countries – its largest buyers of the construction and manufacturing material – due to a fresh wave of covid-19 infections in the region, Mysteel consultancy reported.
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