The world’s biggest steel producer sounded the alarm about an industry crisis in China that carries the potential to ripple around the globe and plunge the sector into a deeper downturn.
China’s steel market — by far the world’s largest — is flashing multiple warning signs as the protracted property downturn shows no signs of ending, while factory activity remains subdued. Baowu alone produces about 7% of the world’s steel, and its commentary is closely tracked to gauge the market mood in the Asian nation.
Iron ore futures in Singapore fell as much as 3.4% to $95.20 a ton, the lowest level since May last year. The rout in steel markets was even more marked, with rebar futures in Shanghai plunging more than 4% to the cheapest since 2017. BHP, which gets much of its revenue selling iron ore to China, fell nearly 3%.