Iron ore price hit lowest since 2020 on global steel demand concerns

Iron ore extended its rout to the lowest level in more than two years on mounting concerns over global steel demand.

The steel-making ingredient hit $82.45 a ton in Singapore on Thursday, its lowest since May 2020. Prices have fallen more than 50% from a peak in March. 

“A bleak economic outlook and challenges in China’s property market do not bode well for bulk commodities,” Australia & New Zealand Banking Group Ltd. said in a note. 

“The peak season is coming to an end. The previously expected demand recovery did not meet expectations, let alone exceed expectations,” Huatai Futures analysts said in a note.

“The market’s confidence in steel prices has weakened.”

Hopes that the recently concluded Communist Party congress would bring an easing of President Xi Jinping’s flagship policy to rein in real-estate debt have faded. The nation’s steel inventories are again expanding, while its winter output curbs and Europe’s energy crisis are weighing on production.

Investors are also watching for signs of increasing supplies. Fortescue Metals Group Ltd. reported record-high exports for its fiscal first quarter. Meanwhile, Vale SA is expected to report earnings later on Thursday.

(With files from Bloomberg and Reuters)