Iron ore rose from its lowest close since November 2022, as bearish investors took pause after a sharp slump for the steelmaking material.
The flick higher on Friday ends five days of losses amid torrid conditions in China’s steel market, where prices for key products like rebar and hot-rolled coil continue to soften. Iron ore is still down about 9% for the week.
“There is no significant improvement in demand for steel products, so there’s little room for steel mills to resume production,” Zhang Shaoda, an analyst with China Futures Co., said. “The downward trend for iron ore is expected to continue.”
Steel consumption in China has weakened because of the country’s protracted real estate slowdown. While exports and growth in other sectors are softening the blow, cuts to steel output have left the iron ore market saddled with excess supply.
Singapore iron ore futures rose 0.9% to $91.85 a ton as at 3:55 p.m. local time.
Spot steel prices in China have continued to decline this week, underscoring weakness even as the market heads into what’s typically a busier construction period. Hot-rolled coil, which had posted a recovery in the second half of August, has returned to its cheapest since 2017, according to Shanghai SteelHome E-Commerce Ltd.
Read More: Iron ore price sinks as steel group warns of ‘flash in a pan’ recovery
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