Iron Ore Slumps as Demand Doubts Persist with China’s Reopening

After five days of increases, iron ore fell, and copper fell as China's markets reopened. Investors were assessing the likelihood of near-term demand in the largest metals consumer in the world.

After reaching their highest closing since the end of January, iron ore futures fell as much as 3.4% before cutting losses. Premier Li Qiang called for "pragmatic and forceful" measures to restore the economy's confidence, but Beijing chose to maintain the same interest rate on its policy loans for a year. Concerns over China's protracted property crisis, which affects a sector that supplies nearly 40% of the world's steel demand, have caused iron ore prices to decline this year. This week will bring more information about the forecast when major producers of iron ore, such as Rio Tinto Group and BHP Group Ltd., release their earnings reports.

Steel consumption is still low, and industry profits are low. According to Minmetals Futures Co. Ltd., local governments may nevertheless increase their efforts to support activities. According to Mysteel, major projects in several provinces, including Guangdong, are starting up again, and data indicated that over the Lunar New Year holiday, existing home sales in important cities increased.