Iron ore prices fell to their lowest since 2022 amid concerns about oversupply, after warnings of an industrial crisis in China that could spread globally and push the sector into a deeper slowdown, according to the American “Bloomberg” agency.
Singapore steel futures fell on Thursday for a fourth straight day, reaching below $94 a ton, after data from China showed that mills cut steel production to about 83 million tons last month, down 9 percent from the previous year.
The steel market in China, the world’s largest market, is sending multiple warning signals amid no signs of an end to the prolonged slump in the property market and a decline in Chinese factory activity, according to “Bloomberg.”
This week, China’s largest steel producer, “Baowu Group,” sounded the alarm about an industrial crisis in the country that could spread globally and push the sector into a deeper slowdown.
Global investors are focusing on the “stumbling” Chinese economy even as they contemplate the possibility of a “recession” in the United States, with the Federal Reserve moving to cut interest rates, according to previous reports by “Bloomberg.”
China’s economy has slowed this year as officials struggle to address an ongoing property crisis that has hurt demand for steel.
ArcelorMittal, the world’s second-largest steelmaker based in Luxembourg, described the increase in exports from China to the global market as “aggressive.”
That is likely to be a concern for rivals in Asia, Europe and North America as they grapple with a new wave of Chinese exports, which could prompt them to push for trade measures, according to the agency.
Shipments from China are expected to reach about 100 million tons this year, the highest since 2016, as producers there struggle to make up for a domestic slowdown.
Iron ore futures fell as much as 2% to $93.70 a ton, the lowest intraday price since November 2022, before trading at $94.60 in Singapore, according to Bloomberg. The recent selloff has dragged down mining stocks, with BHP Group Ltd. shares down by more than a fifth in Australia this year.