Iron ore prices fell below $100 for the first time in three months after the Chinese economy showed signs of weakening.

Iron ore prices fell below $100 for the first time in three months, driven by increased supply pressure and slowing demand in China.

June 17, 2569 at 13.17:XNUMX a.m. Bloomberg News reported that Iron ore prices fell below $100 per ton for the first time since March. The market faced pressure from increased supply, while demand from China, the world's largest consumer and importer of iron ore, began to show signs of slowing.

Iron ore futures contracts in Singapore plunged as much as 2.1% to $99.10 per tonne before settling at $99.65 per tonne in the afternoon, marking the second consecutive day of declines.

Key pressure comes from recent Chinese economic data reflecting a slowdown in economic activity. China's steel production continued to decline in May, while fixed asset investment and consumer spending weakened to levels not seen since the COVID-19 pandemic.

Hu Yanping, a researcher from Citic Futures. It was noted that the high supply level and increasing stock levels are becoming increasingly evident in the iron ore market, while weaker-than-expected economic data from China is further pressuring steel and metal commodities, which are highly sensitive to domestic economic conditions.

Since the beginning of the year, iron ore prices have fallen by about 6% and are facing their fifth consecutive weekly decline, the longest downtrend since February.

In addition to weak demand in China, the market is also watching for increased production capacity at the large Simandou Mine in Guinea, which would boost the global iron ore supply in the coming period.

Another factor exacerbating the price slump is the drop in crude oil prices this week, following signs that the Strait of Hormuz may reopen for normal operation. This has led to lower shipping rates and reduced cost support for iron ore prices.

Although major mining companies remain optimistic about demand prospects in other Asian countries, particularly India which is rapidly expanding its steel production capacity, this growth may still not be enough to offset weaker iron ore demand from China.

The latest situation reflects that the direction of the iron ore market remains primarily dependent on the Chinese economy. If China's real estate, investment, and steel production sectors do not recover significantly, prices are likely to face continued pressure in the second half of the year.

refer : bloomberg.com

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