Chinese iron-ore futures fell sharply Tuesday.
AFP via Getty Images
Chinese iron-ore futures slumped Tuesday as steel output in the world’s second-largest economy fell to its lowest level since March 2020 in late October. The decline in iron prices, in turn, pressured metals and mining stocks.
Futures for iron ore to be delivered in China in November fell more than 6% Tuesday—down almost 20% in the last five days alone—as contracts for December delivery slipped 5.7%.
Meanwhile, the most active iron-ore futures for January traded in China on the Dalian Commodity Exchange tumbled 10%, to the daily trading limit, falling below 600 yuan ($93.80) for the first time since November 2020, according to a report from Reuters.
The plunge in prices comes amid a decline in steel output in China, by far the world’s largest producer of the industrial material. Concerns have mounted over headwinds to Chinese economic growth amid a global energy crunch that has seen the country cap factory output as power shortages wrack the manufacturing sector.
Steel output fell 2% in the final 11 days of October to the lowest levels since March 2020, according to data from Chinese market intelligence group Mysteel.
Metals and mining giants, many of them listed in London, tumbled Tuesday amid the pressure on iron prices. Rio Tinto (ticker: RIO) was down 2.8%, Anglo American (AAL) fell 3.9%, BHP (BHP) slipped 3.4%, Antofagasta (ANTO) declined 3%, Glencore (GLEN) decreased 2.8%, and Fresnillo (FRES) moved 1.3% into the red.
London’s FTSE 100
index was 0.6% lower, underperforming European stock market indexes Tuesday, feeling the weight of declines in metals and mining as well as energy.
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