Iron ore price retreats on surging China covid cases

The iron ore price fell on Monday as surging covid-19 cases in China prompted traders to book some profit from the recent rally.

China is in the first of an expected three waves of covid cases this winter, according to the country’s chief epidemiologist, forcing many people to stay home.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $108.79 a tonne Monday morning, down 3.2%.

The most-traded iron ore contract for May delivery on China’s Dalian Commodity Exchange ended daytime trade 3.7% lower at 793.50 yuan ($113.75) a tonne.

China’s covid-19 surge “might provoke an increasing proportion of the nervous population to wait out the current wave at home, destroying economic activity in the process,” Navigate Commodities Managing Director Atilla Widnell said.

The market pullback was broad-based even as Beijing, in a statement on Friday following an agenda-setting meeting, pledged to focus on stabilising its $17 trillion economy in 2023 and step up policy adjustments to ensure key targets are hit.