• 4 minutes Energy Armageddon
  • 6 minutes "How to Calculate Your Individual ESG Score to ensure that your Digital ID 'benefits' and money are accessible"
  • 12 minutes "Europe’s Energy Crisis Has Ended Its Era Of Abundance" by Irina Slav
  • 13 hours Is Europe heading for winter of discontent with extensive gas shortages?
  • 1 day "False Flag Planted In Nord Stream Pipeline, GFANZ, Gore, Carney, Net Zero, U.S. Banks, Fake Meat, and more" - NEWS in 28 minutes
  • 16 hours ""Green" Energy Is a Scam. It Isn't MEANT to Work." - By James Corbett of The Corbett Report
  • 1 hour Wind droughts
  • 6 days Kazakhstan Is Defying Russia and Has the Support of China. China is Using Russia's Weakness to Expand Its Own Influence.
  • 2 days Xi Is Set To Be Re-Elected As China’s Leader
  • 21 hours 87,000 new IRS agents, higher taxes, and a massive green energy slush fund... "Here Are The Winners And Losers In The 'Inflation Reduction Act'"-ZeroHedge
  • 11 hours "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 11 hours Australian power prices go insane
  • 10 days Oil Prices Fall After Fed Raises Rates
  • 15 hours Europeans and Americans are beginning to see the results of depending on renewables.
  • 12 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
Ag Metal Miner

Ag Metal Miner

MetalMiner is the largest metals-related media site in the US according to third party ranking sites. With a preemptive global perspective on the issues, trends,…

More Info

Premium Content

Iron Prices Dip As Demand From China Slows

  • Iron prices have seen a turbulent 2022, and it will likely get worse before it gets better.
  • Fluctuating steel demand in China remains one of the top reasons for price changes in the iron market.
  • Despite the market uncertainty and dramatic price changes, iron ore is still up for the year.

2022 has been a roller coaster ride for iron ore prices, which dipped yet again on Monday. Of course, demand from Chinese steel remains the top reason for either a rise or downturn in prices. This week, as it turns out, was no different. In fact, prices tumbled immediately after analysts explained their “bleak outlook” for demand, citing that Chinese steel mills are reeling from losses and cutting production.

Chinese President Xi Still Eager to Keep the Rebound on Track

The news was so impactful that predictions of iron ore dropping below the $100 mark almost came true. Indeed, the benchmark 62% Fe fines imported into Northern China fell 4.41% to just US $109.89 per ton. To make matters worse, the September iron ore contract on China’s Dalian Commodity Exchange ended daytime trade 5.8% lower, finishing at around US $107 a ton. Inventories in China are on the rise mainly due to reduced uptake. Of course, weak local demand and COVID-19 restrictions continue to plague the entire sector. Lastly, growing fears of a global recession are damping ore prices across the board.

Related: China Is Winning Big As Russia Pivots To Asia

Back in mid-June, iron ore prices enjoyed a nice rebound. This was after Chinese President Xi Jinping vowed to initiate effective measures to achieve the country’s economic and social development goals.

At the time, his call for greater coordination on economic policy to avoid disrupting the recovery of the Chinese economy was seen as a strong signal to lift market sentiments. Still, iron ore prices have been fickle, and they plummeted just a few days after the speech.

Iron Ore Prices Still Have Room to Slide

All things considered, iron ore has been up in 2022, averaging around $121 per ton. Still, current levels are a far cry from that, and even further from the $157 per ton price we witnessed in March. Unfortunately, by June, prices tumbled to their lowest levels since the first week of December, 2021.

Those negative prices affected steel markets too. For instance, the price of reinforcement bars used in the construction industry have declined 20% since early May. Now it seems that ore prices may experience a further downturn. According to a group of analysts, Chinese blast furnaces may continue to work at less than normal capacity because of better production discipline, adding to the stockpile.

Another factor hurting prices was the hiking of interest rates by the US Federal Reserve and other central banks. Though designed to curb inflation, the increase will surely affect demand from the global automotive and construction industries.

And to think that merely a year ago, iron ore prices had hit a record high above US $230 a ton. Back then, they were riding a wave of strong, bullish post-pandemic demand. It’s amazing how quickly the markets can flip.

By AG Metal Miner

More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News