Muzhu Mining Ltd. (CSE: MUZU)
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This year, iron ore futures prices fell below $90 per tonne for the first time since 2022. This fall has been driven by weak demand from China, a major iron ore consumer, and concerns about global economic growth. Iron ore futures prices have reportedly fallen by more than a third this year, while a failure to resolve China’s steel crisis is threatening demand for the raw material.
Last week, Goldman Sachs Group cut its long-term bullish copper forecast by about $5,000, in large part due to weak Chinese demand, underscoring the cautious mood in the metals market. Uncertainty over November’s U.S. presidential election will keep the global economy subdued and weigh on metal prices, Citi said.
Iron ore futures in Singapore fell as much as 2.3 per cent to $89.60 a tonne, after trading at $90.70 as of 2:29 p.m. local time. Aluminium was little changed after posting its eighth one-day drop on Friday. The LMEX index of six metals is up just 3 per cent so far this year, compared with a 25 per cent gain in mid-May.
China’s Baowu Steel Group Corp, the world’s biggest steel producer, said the industry could face a crisis worse than the economic downturns of 2008 and 2015 as China’s steel consumption wanes due to a prolonged property slowdown. While exports and growth in other sectors are cushioning the blow, cutbacks in steel production have plunged the iron ore market into a supply glut. China’s core inflation just fell to its weakest in more than three years, the latest sign of weakening demand in the world’s second-largest economy, metals analysts at Citigroup said. However, steel buying usually resumes after the summer, which could give mills a break.
“We expect iron ore prices to receive some support from mid-September onwards as the autumn construction season in China kicks in, as well as seasonal restocking ahead of the Golden Week holiday,” said Kaan Peker, capital markets analyst at Royal Bank of Canada.
