Iron-ore prices posted their biggest one-month fall in almost eight years as China's huge steel engine cools and global shipments of the commodity rise.
While the decline in prices eases pressure on steelmakers by reducing the cost of a key ingredient, it will erode the profits of large miners including BHP Group Ltd. and Rio Tinto PLC. The outlook for the commodity's price meanwhile remains muddy, with market-watchers waiting for signals in China's robust property market and Beijing's efforts to stimulate economic growth for signs of a rebound.
August's dive almost erased a rally that pushed the market as high as $126 a ton in July, although prices have edged up to $89.35 a ton in recent days on better Chinese economic data, looser curbs on some steel production there and hopes of further stimulus.
Chinese steel production fell in June and July, albeit from record rates, and supplies of iron ore have picked up, particularly from Brazil.
A slowdown in China's housing market-which accounts for roughly 40% of China's steel demand-may push iron-ore prices as low as $50 a ton in the not-too-distant future, according to Liberum.
Iron ore's drop, however temporary, offers some relief for steelmakers, which were grappling with sharply higher prices for the raw material at a time when steel prices were softening.
U.S. Steel recently said it was struggling with rising raw-material costs in Europe as it idled one furnace on the continent and two in the U.S. Booming iron-ore prices have boosted earnings at BHP and Rio Tinto, the world's two largest listed miners by market value, and enabled them to lavish cash on shareholders.
https://www.wsj.com/articles/chinese-steel-slowdown-slams-iron-ore-prices-11567505144?mod=hp_lista_pos3
While the decline in prices eases pressure on steelmakers by reducing the cost of a key ingredient, it will erode the profits of large miners including BHP Group Ltd. and Rio Tinto PLC. The outlook for the commodity's price meanwhile remains muddy, with market-watchers waiting for signals in China's robust property market and Beijing's efforts to stimulate economic growth for signs of a rebound.
August's dive almost erased a rally that pushed the market as high as $126 a ton in July, although prices have edged up to $89.35 a ton in recent days on better Chinese economic data, looser curbs on some steel production there and hopes of further stimulus.
Chinese steel production fell in June and July, albeit from record rates, and supplies of iron ore have picked up, particularly from Brazil.
A slowdown in China's housing market-which accounts for roughly 40% of China's steel demand-may push iron-ore prices as low as $50 a ton in the not-too-distant future, according to Liberum.
Iron ore's drop, however temporary, offers some relief for steelmakers, which were grappling with sharply higher prices for the raw material at a time when steel prices were softening.
U.S. Steel recently said it was struggling with rising raw-material costs in Europe as it idled one furnace on the continent and two in the U.S. Booming iron-ore prices have boosted earnings at BHP and Rio Tinto, the world's two largest listed miners by market value, and enabled them to lavish cash on shareholders.
https://www.wsj.com/articles/chinese-steel-slowdown-slams-iron-ore-prices-11567505144?mod=hp_lista_pos3
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