Iron ore tumbles to 2-month low on concerns over weakening China demand

BEIJING: Iron ore futures fell to a two-month low on Tuesday, weighed down by lingering weak fundamentals and concerns over demand prospects in top consumer China following the latest carbon emission plan for the steel sector.

The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 3.69% lower at 810 yuan ($111.68) a metric ton, the lowest since April 11.

The Chinese futures market was closed on Monday for the Dragon Boat Festival.

The benchmark July iron ore on the Singapore Exchange was 0.9% lower at $104.45 a ton, as of 0334 GMT, the lowest since April 9. Iron ore supply has risen while demand has softened and showed little room for improvement, analysts at Sinosteel Futures said in a note, adding that high portside inventory weighed on the market.

Hot metal output will have to be reduced by 46 million tons in 2024 if steelmakers were to enforce the carbon emission plan stringently, analysts at Jinrui Futures said in a note, forecasting daily hot metal output at 2.27 million tons from June to December.

China’s state planner issued last Friday a special action plan on conserving energy and reducing emissions of carbon dioxide (CO2) in the steel sector.