Oil / Commodities - Iron ore is headed for its biggest weekly drop since mid-February as China’s spreading virus restrictions and worsening property crisis prevented a recovery in demand. The steel-making ingredient was steady near $126 a ton in Singapore on Friday and is down around 9% this week. Beijing reported a slight increase in COVID cases, while officials denied the city will be locked down amid growing concern the capital’s response to its outbreak will be intensified. In the property market, China’s fourth largest developer Sunac China Holdings missed a dollar bond payment this week. The latest default is spurring fears that there could be more to come, which would further weaken a sector that is important for iron ore demand. Iron ore has fallen around a quarter from this year’s peak in early March as the virus restrictions spread. The lockdowns are making it hard for the government to deploy infrastructure spending, and are occurring at a time of year when construction typically ramps up after winter. While steel production could increase to support what is supposed to be peak construction season, looming control measures remain a serious downside risk.
Newsletter - May 13, 2022
Newsletter - May 13, 2022
Newsletter - May 13, 2022
Oil / Commodities - Iron ore is headed for its biggest weekly drop since mid-February as China’s spreading virus restrictions and worsening property crisis prevented a recovery in demand. The steel-making ingredient was steady near $126 a ton in Singapore on Friday and is down around 9% this week. Beijing reported a slight increase in COVID cases, while officials denied the city will be locked down amid growing concern the capital’s response to its outbreak will be intensified. In the property market, China’s fourth largest developer Sunac China Holdings missed a dollar bond payment this week. The latest default is spurring fears that there could be more to come, which would further weaken a sector that is important for iron ore demand. Iron ore has fallen around a quarter from this year’s peak in early March as the virus restrictions spread. The lockdowns are making it hard for the government to deploy infrastructure spending, and are occurring at a time of year when construction typically ramps up after winter. While steel production could increase to support what is supposed to be peak construction season, looming control measures remain a serious downside risk.