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Iron ore prices hit lowest point in 14 months due to weak construction demand
In early August, iron ore prices hit a 14-month low due to weak steel demand, driven by a slump in China’s real estate sector. Investment in real estate dropped by 10.2% year on year, and new construction starts fell by 23.2%.
Although the real estate market's share of steel consumption has declined since the onset of the crisis in 2021, it remains a crucial sector for steel demand. Consequently, the health of the construction industry heavily influences the steel sector and the demand for its raw materials.
This downturn, coupled with a 9.5% monthly and 9% yearly decline in steel production in July, has led to widespread losses among steelmakers. As of August 12, 79 steel mills were closed for repairs, up 41 from the previous year.
Reports indicated that around 95% of China’s steelmakers are currently operating at a loss. Additionally, new rebar standards and anti-dumping measures from export markets are further squeezing demand and export potential for Chinese steel, threatening the industry’s stability.
Although the real estate market's share of steel consumption has declined since the onset of the crisis in 2021, it remains a crucial sector for steel demand. Consequently, the health of the construction industry heavily influences the steel sector and the demand for its raw materials.
This downturn, coupled with a 9.5% monthly and 9% yearly decline in steel production in July, has led to widespread losses among steelmakers. As of August 12, 79 steel mills were closed for repairs, up 41 from the previous year.
Reports indicated that around 95% of China’s steelmakers are currently operating at a loss. Additionally, new rebar standards and anti-dumping measures from export markets are further squeezing demand and export potential for Chinese steel, threatening the industry’s stability.
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