yolowire.com - The selloff in IronOre is worsening amid signs that demand for steel products in China is weakening and unlikely to recover in the near-term.
The price of iron ore is down 8% today (Sept. 5) and trading at $92 U.S. a ton, its lowest level in two years amid escalating concerns in China.
The price of the industrial metal has declined 34% since the start of the year when it was at $141.45 U.S. a ton.
Data showing slumping output at Chinese steel mills is leading to an accelerated selloff in iron ore’s price. China operates the world’s biggest steel industry.
However, demand for steel in China is rapidly eroding as the nation of 1.4 billion people struggles with a softening domestic economy and debt crisis in its property sector.
Consequently, construction within China and demand for steel has decreased sharply in recent months, and analysts are warning of a prolonged downturn.
A majority of analysts surveyed by Reuters expect China’s economy to miss the government’s 5% growth target this year barring some large-scale stimulus measures from Beijing.
In recent weeks, China’s largest steel mills have warned that the industry must adjust to a new era in which demand is likely to continue declining.
Some analysts are now warning that China’s steel consumption will fall to between 70% and 80% of its historic peak.
Iron ore prices are currently at their lowest level since 2022 and heading towards a key support level of $90 U.S. a ton.
Any breakdown below $90 U.S. a ton could see an accelerated selloff in iron ore’s price, warn analysts.