FX.co ★ Iron Ore Falls to 4-Month Low

In November, iron ore futures in China declined to CNY 760 per tonne, marking a four-month low, due to clear signs of weak demand. Although China, the leading steel producer globally, saw its steel exports shrink by 12.5% from the previous year to 9.782 million tonnes in October, iron ore imports actually rose by 10.2%. This trend highlights the global downturn in demand for Chinese steel, with regions like Southeast Asia and Latin America introducing protectionist measures to counter the influx of low-cost Chinese metal. Chinese steel producers have increasingly relied on international markets as domestic demand weakens, aggravated by a prolonged property sector downturn and declining manufacturing needs, as indicated by manufacturing and construction PMIs deeply entrenched in contraction. Meanwhile, global shipments of iron ore have remained high through October, resulting in increased stockpiles in China. Additionally, anticipation of heightened supply from the large Simandou mine in Guinea has further pressured prices.