By Onome Amuge
Iron ore futures traded lower with the Dalian benchmark hitting a three-week low, as optimism that China would relax its stringent zero-COVID policy faded, while a decline in demand for the steelmaking ingredient dragged spot prices to an 11-month low.
On the Singapore Exchange, benchmark November iron ore was down 0.9 percent to $92.95 a tonne.
SteelHome consultancy data showed Spot 62 percent-grade iron ore settled at $95.50 a tonne during the week, its lowest valuation since November 2021.
Other steelmaking ingredients also remained under pressure as Dalian coking coal and coke slipped 0.1 percent and 0.2 percent, respectively.
On the other hand, ferrous metals on the Shanghai Futures Exchange were somewhat supported as both hot-rolled coil and wire rod gained 0.2 percent, and stainless steel rose 0.5 percent.
As it stands, market participants are closely watching how China will address challenges facing its economy, including a downturn in the property sector.
According to reports, signals that Beijing will stick with its stern measures to control COVID outbreaks after a pivotal Communist Party congress beginning October 16 weighed on futures markets.
The world’s top steel producer has ramped up COVID testing, extended quarantine times while some public spaces remain closed to curb rising infections. This has resulted in a significant reduction in the demand and production of steel in the world’s largest consuming market.
“We should not be overly pessimistic about finished products,” Huatai Futures analysts said, pointing out that reduced steel production could eventually help prop up prices.
In the short term, they noted that the market will be dominated by macroeconomic factors and increased uncertainties.