Iron ore rebounds but prices record sixth weekly loss

Iron ore prices edged higher on Friday after hitting 2022 lows in the previous session, but the market stuck to a sixth straight weekly decline on worries about global demand prospects. Iron ore’s losses in the week reflect the gloomy demand outlook as China stuck to its zero-COVID policy despite its toll on the economy, according to market analysts.

Chinese steel prices also rebounded though gains were muted, with analysts noting that the market is temporarily lacking new themes to boost prices or boost market confidence.

Benchmark November iron ore on the Singapore Exchange was up 1.6 percent at $91.25 a tonne at the close of the week after falling to $89.20 a tonne the previous day. Dalian’s most-traded January iron ore also gained, rising 1.5 percent to 686 yuan or $94.68 a tonne.

Dealers reported that the steelmaking ingredient rebounded from its lowest in more than six weeks in top steel producer China as prices climbed on the Dalian Commodity Exchange, after traders initially shrugged off an unconfirmed report about an easing of Covid-19 curbs.

ING analysts noted that the relaxation will not be enough to attract many foreigners to enter the country, as the quarantine period is still long. They however explained that once the reduction in the number of quarantine days begins, the likelihood of further reductions will grow, which bodes well for China’s economic growth and demand for iron.

Meanwhile, the World Steel Association has projected a 2.3 percent contraction in global steel demand this year, citing recession risks and China’s Covid-19 curbs and property sector downturn.

On the Shanghai Futures Exchange, rebar rose 0.6 percent, hot-rolled coil gained 0.7 percent, and wire rod climbed 0.3 percent, but stainless steel was flat.

Other Dalian steelmaking inputs also advanced, with coking coal and coke up 1.5 percent and 0.3 percent, respectively.