Value drops to 2022 low before new wave of COVID-19 outbreak in China

Iron ore prices fall to this year's lows as China faces a new outbreak of COVID-19 in several regions including Shanghai, raising concerns about the possibility that steel mills will continue to suffer. close the door.

The prospect of a world economic recession is becoming more and more obvious, weighing heavily on the commodity market, including steel. Many comments expressed concern about the weakening of steel demand in China, which is already very low, and the pressure on the iron ore market is stronger.

The price of iron ore for delivery in August at the Singapore Exchange fell 5.4% to 106.45 USD/ton.

Shanghai, China's most populous city, has lifted a two-month embargo, but the government will continue to impose strict travel restrictions if new cases are detected.

All residents in nine of the financial hub's 16 counties will be tested twice this week following a new outbreak of COVID-19.

Experts say that the COVDI-19 epidemic may return to China again because more and more positive cases are detected in Shanghai.

China's implementation of the Zero COVID policy has caused many localities to close and production activities to be halted.

However, experts say that in the worst-case scenario, if the COVID-19 epidemic spreads rapidly, the closure will only be local in some areas, not as widespread as before because the government is trying to balance between controlling COVID-19 and developing the economy.

According to the National Bureau of Statistics (NBS), China's output of crude steel, cast iron and finished steel products in May was 96.61 million tons, 80.49 million tons and 122.61 million tons, down 3. 5%, up 2% and down 2.3% over the same period last year.

Average daily production was 3.11 million tons, 2.59 million tons and 3.95 million tons, up 0.8%, 1.5% and 3.3% higher than the daily average for the same period. period last year. Generally in the first 5 months of the year, China produced 435.02 million tons of crude steel, 360.87 million tons of pig iron and 549.31 million tons of steel products, down 8.7%, down 5.9% and down 5. .1% per year.

According to NBS, in May, China imported 806,000 tons of steel products, down 33.2% over the same period last year; crude steel imports reached 1.36 million tons, down 46%. In the first 5 months of the year, the country imported a total of nearly 5 million tons of finished steel and 8.72 million tons of crude steel, down 18.3% and 20.3% respectively.

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