Iron ore futures experienced a sharp decline in Singapore, adding to a period of turbulent trading fueled by growing apprehension surrounding Chinese demand. The downturn also affected base metals across the board.

This instability comes as the steelmaking component oscillates between gains and losses, reflecting investors’ struggle to anticipate future developments following a significant 25% price drop since the beginning of the year. The absence of clear policy signals from Beijing has only exacerbated uncertainties regarding potential rebounds in construction activity.

As of 12:20 p.m. in Singapore, iron ore plummeted by 2.6% to $105.75 per ton, although it remains above last week’s nine-month low of $97.

Analyst Wei Ying from China Industrial Futures Ltd. remarked, “Investors are very cautious about the demand outlook.” She emphasized that prices tend to decline in the face of demand weaknesses, a trend exacerbated by dwindling steel-trading volumes in China.

China’s steel consumption has been severely impacted by the nation’s prolonged property crisis, with the beginning of 2024 witnessing a buildup of iron ore inventories at ports. Concurrently, the spot price of rebar, a widely used construction steel product, has reached its lowest point in nearly seven months.

Elsewhere, aluminum retreated from its recent peak on the London Metal Exchange, dropping 0.3% to $2,318 per ton. Copper, zinc, and nickel also experienced declines.

Jiang Hang, head of trading at Yonggang Resources Co., noted, “The rally in base metals prices has gone ahead of real demand.” He highlighted that Chinese demand, particularly for copper, has suffered significantly following price increases.

The current market landscape underscores the delicate balance between supply and demand dynamics, with investors closely monitoring developments in China’s economic activities for potential market shifts.

*This report was compiled according to News24’s editorial standards.*

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