- Iron ore prices fell to a ten-month low in April 2024.
- The drop was attributed to a warning from the China Iron and Steel Association about delayed steel demand recovery.
- Chinese steel mills were advised to take proactive measures to balance supply and demand in the domestic market.
The fear expressed by institutional analysts at the start of the year that 2024 will see some degree of volatility on the iron ore price front seems to be coming true. On April 1, the beginning of the second fiscal quarter, iron ore prices fell to a ten-month low. Costs for the raw steel-making material dipped by 3.9% to U.S. $96.25 a ton on the Singapore Exchange in early trade before recovering. In the last quarter, ore prices had a rough ride as investors tried to combat the fallout from weaker Chinese real estate sector demand.
Some experts said that the sudden drop on Monday stemmed from a warning issued last week by The China Iron and Steel Association (CISA), which stated that the property downturn and a weak infrastructure were delaying steel demand recovery. For March 2024, the steel industry’s purchasing managers index was down to 44.2, the lowest since May last year.
In Asian markets, the second quarter commenced with turbulent fluctuations in iron ore prices. According to this report, iron ore prices experienced significant declines followed by rapid recoveries amidst holiday-affected trading. A call from China’s steel industry association for producers to reduce production, coupled with iron ore stocks reaching a two-year high at 45 major Chinese ports, prompted the instability.
During the Easter break, the price of 62% Fe fines on the SGX iron ore platform plummeted by over 5% from U.S. $101.04 a ton to a low of U.S. $95.60 a ton at the open. However, the price gradually rebounded after hitting a low of U.S. $95.40 a ton. Eventually, it managed to crawl back up to U.S. $101.65 a ton.