China's ferrous derivatives plummeted on March 9, with iron ore sinking nearly 6% in early trade, as fears that a fast-spreading coronavirus outbreak could inflict a more serious damage to the global economy sent financial markets skidding.
Adding to market anxiety, China's Baoshan Iron & Steel Co Ltd, or Baosteel, which is the listed arm of the country's biggest steel producer Baowu Steel Group, reported a fire incident at one of its blast furnaces.
Baosteel, however, said the incident at a Shanghai plant on March 8 would have limited impact on its molten iron output this year.
The Dalian Commodity Exchange's most-traded iron ore contract, with May expiry, sank as much as 5.8% to hit 620 yuan/t ($89.50/t). It was down 3.4% by 0240 GMT.
Iron ore futures on the Singapore Exchange slid as much as 4.4%.
"The global spread of the coronavirus is resulting in simultaneous supply and demand shocks. We expect these shocks to materially slow economic activity, particularly in the first half of this year," Moody's Investors Service said in a statement.
Moody's has downscaled its 2020 baseline growth forecasts for all Group of 20 economies. Growth is now seen at 2.1% for the group, down by 0.3 percentage point from the previous forecast.
China's growth is now forecast to hit 4.8%, down from a previous estimate of 5.2%, while the U.S. economy is seen expanding 1.5% instead of 1.7% as previously projected, Moody's said.
China's iron ore imports rose 1.5% over January and February from the same period a year earlier, supported by firm demand at steel mills although downstream sectors experienced disruptions due to the coronavirus outbreak.
China's industry ministry urged metals firms to stop ramping up production and avoid "vicious" competition with one another in the wake of the outbreak.
Industry benchmark 62% iron ore's spot price settled at $90.30 a tonne on March 6, slipping for the first time in five days, data showed.
Construction steel rebar on the Shanghai Futures Exchange was down 1.7%, while hot-rolled coil shed 1.4% and stainless steel lost 2.8%.
Coking coal dropped 0.7% and coke slid 2.1%.
Global share markets tumbled on March 9 as panicked investors fled to bonds to hedge the economic shock of the coronavirus, and oil plunged more than 20% after Saudi Arabia slashed its official selling price.
(Writing by Tammy Yang Editing by Jessie Jia)
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