China iron ore prices lowest in more than a year on weak demand outlook

Accordingly, the price of iron ore for January 2022 on the Dalian Commodity Exchange ended November 18, down 5.1% compared to the previous session, after falling 4.6% on November 17. , down 511.50 yuan ($80.21)/ton, in a session where the price dropped to only 510.50 yuan, the lowest since November 4, 2020.
On the Singapore Exchange, the December 2021 iron ore contract at the same time fell 3.2% to 85.95 USD/ton. Iron ore with 62% Fe content imported into China (for immediate delivery at this country's seaport) was at $90.5/ton on November 17, close to the 18-month low reached at the close on November 15. (90 USD/ton).
The price of steel products on the Chinese market also decreased in this session. Accordingly, the price of rebar - used in construction - decreased by 0.1% compared to the previous session, down to 4,362 CNY/ton, hot-rolled coil - used in production - decreased by 1.9% to $4,638/ton , wire steel and stainless steel also followed a downtrend.

From the beginning of November until now, the price of iron ore with 62% content has only fluctuated in the range of 90-100 USD/ton, of which two sessions fell below 90 USD/ton when China released steel production data showing the decline.

Despite the rapid decline, analysts at Zhongzhou Futures Co Ltd said that "Iron ore prices have not bottomed yet" as the world's top steel producer continues to limit steel production to meet decarbonization targets and The instability in the country's real estate sector will continue to put pressure on the steel material market. China buys about 70% of the world's seaborne iron ore and produces about 50% of the world's steel.
Also according to analysts of Zhongzhou Futures Co Ltd: "The profit of some steel mills turned negative, and steel mills switched from restricting production due to being forced to actively limit production." .

China's monthly steel output has been falling continuously since July 2021, contrary to the trend of output increasing by double digits in the first 6 months of the year, due to strict control of output levels and shortages. Electricity severely affects both supply and demand. Therefore, the supply of iron ore at the seaports of this country (the volume of imported iron ore) has become redundant, increasing the downward pressure on prices. Iron ore inventories at Chinese ports last week rose to a 31-month high of 147.6 million tonnes, according to data from consulting firm SteelHome.

China's crude steel output in the first 10 months of 2021 reached 877.05 million tons, down 0.7% year on year. Average steel production in October 2021 was 2.3 million tons, the lowest since December 2018 and the fifth consecutive month of decline, bringing total production in October to 71.58 million tons.