Iron ore is facing renewed pressure and risks sliding back into the $60s, as China’s economy shows signs of cooling and global mine supply increases, while planned steel capacity cuts in the world’s biggest consumer this winter could further cut demand.
Ore with 62% content in Qingdao fell 3.4% to $73.99 a dry ton on Thursday, posting its biggest loss since May and sending prices to the lowest in a month, according to Metal Bulletin.
The commodity, which almost hit $80 in August, is set for its first back-to-back weekly decline since June. Futures in Dalian fell to a two-month low on Friday.
The steel-making raw material is retreating with base metals after a slew of negative outlooks, with Barclays saying the commodity is “living on borrowed time.” Industrial output and retail reports from China this week suggested an unexpectedly slower pace of growth.
While capacity cuts to curb pollution in Asia’s top economy are set to hurt consumption, a further expansion in mine supplies from Brazil and Australia also threatens prices.
