The prices of iron ore dipped below the key level of $100 per tonne for the fourth time in a period of two weeks. The prices have already witnessed downfall by 30% from the peak touched in January this year.
Reportedly, analysts are wondered as to why the steelmaking raw material prices is not falling much below the levels of around $100 per tonne, despite acute crisis in Chinese property sector and lack of meaningful policy support by the Chinese administration to address the sector downturn.
The ongoing lull in Chinese construction sector activity had led to significant fall in steel demand and prices, thus making it unprofitable and unnecessary for many mills in the country to buy iron ore at prevailing market rate. The analyst expects prices to go down further. They predict that the prices are expected to decline to mid-to-late-$80s, taking into account the huge margin pressures faced by steel mills in the country.
The prices of rebars have hit the lowest level since 2017. Also, hot-rolled coils at the lowest level seen in past four years. The support measures announced by the Chinese administration are seen inadequate to lift the sentiments of property sector, which accounts for almost 30% of the country’s total steel demand.
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