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Consumption of steel in China has weakened because of the country’s protracted real estate slowdown, with the world’s biggest steel producer, China Baowu Steel Group Corp, saying the industry could be facing a worse crisis than the downturns in 2008 and 2015
Iron ore hit a 22-month low — sinking below the US$90-a-ton threshold — as a slump in demand in the biggest buyer, China drives losses. Futures have fallen by more than a third this year, tumbling almost 10% last week alone, with pressure ramping up as flagging steel consumption batters loss-making Chinese mills. Still, steel-buying typically picks up after the summer, which could provide a respite for producers if it happens.
Consumption of steel in China has weakened because of the country’s protracted real estate slowdown, with the world’s biggest steel producer, China Baowu Steel Group Corp, saying the industry could be facing a worse crisis than the downturns in 2008 and 2015. While exports and growth in other sectors are softening the blow, cuts to steel output have left the iron ore market saddled with excess supply.
On Friday, former People’s Bank of China Governor Yi Gang said his nation should focus on ending deflation, in a rare admission by a prominent figure in China that falling prices are threatening the country’s growth outlook.
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Iron ore fell as much as 2.3% to USD 89.60 a ton in Singapore, and traded at USD 89.95 at 8:12 a.m. local time. The material also dropped in Dalian, along with steel contracts in Shanghai.
