Iron ore hits lowest since 2022 as steel crisis rattles market

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Iron ore hit the lowest level since 2022 on concern that global supply is running ahead of demand, with China’s steelmakers mired in a crisis and cutting output just as major miners boost exports.

Iron ore falls onto stockpiles at the Fortescue Metals Group Ltd. Cloudbreak mine in the Pilbara region of Western Australia, Australia, on Tuesday, Oct. 17, 2023. --

Futures sank for a fourth day in Singapore, falling below US$94 a ton, as data from China showed mills reduced steel production to about 83 million tons last month, nine per cent lower than a year earlier. The country is the largest importer of seaborne iron ore, and sets the tone in the global market.

Iron ore is one of the year’s biggest losers in commodities, with benchmark prices down by about a third. The struggles facing mills in China were thrown into sharp relief this week as China Baowu Steel Group Corp. — the world’s largest producer — sounded the alarm about an industry crisis as product prices collapse. The nation’s economy has slowed this year, with officials battling to address a drawn-out property crisis that’s hurt steel demand.

Futures retreated by as much as 3.1 per cent to $92.65 a ton — the lowest intraday price since November 2022 — and traded at $93.25 at 5:12 p.m. in Singapore. The recent sell-off has pummeled miners’ shares, with stock in BHP Group Ltd. down by more than a fifth in Australia this year. On the supply side, Port Hedland — Australia’s main maritime gateway for iron ore — reported flows of 43.2 million tons for last month, according to a statement. While that’s down from the all-time record that was set in June, it remains in line with the figure for the same month a year ago.

 

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