Iron ore rallied from its lowest closing level since November 2022 as investors paused after a sharp drop in steel output. The upward move on Friday ended five days of losses amid challenging conditions in the Chinese steel market, where prices of key products such as rebar and hot rolled coil weakened. However, iron ore prices remained down nearly 9% for the week.
China Futures Co. analyst Zhang Shaoda said there is little capacity for steel mills to resume production, noting that there is no significant improvement in demand for steel products. Shaoda emphasized that the downward trend for iron ore is expected to continue.
Steel consumption in China has been weakened by the country's long-running real estate slowdown. While growth in exports and other sectors has softened cuts in steel production, it has raised the issue of oversupply in the iron ore market.
Singapore iron ore futures rose by 0.9% to $91.85 a ton as of 15:55 local time. Spot steel prices in China, on the other hand, continued to decline this week, underscoring weakness despite the market entering a usually busy construction period.
Hot-rolled coil, which rebounded in the second half of August, returned to its cheapest level since 2017, according to Shanghai SteelHome E-Commerce Ltd.
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