Iron ore futures in China and Singapore slumped on March 13, as demand worries worsened on fears that the coronavirus pandemic could cause a global recession, although losses were kept in check by hopes for further policy measures.
Iron ore on China's Dalian Commodity Exchange ended the morning session 1.9% lower at 645 yuan/t ($92.06/t) and was down 2% so far this week. Futures on the Singapore Exchange dropped as much as 2.2%.
Although many businesses in China, the world's biggest consumer of the steelmaking raw material, have reopened after weeks of shutdowns due to virus containment measures, overall demand for metals remains clouded due to growing fears that the outbreak would hammer global economic activity.
"The market has been looking for further central bank easing and global fiscal stimulus amid the COVID-19 outbreak," ING commodities strategists wrote in a note.
"On base metals and iron ore, there have been growing hopes for China's fiscal stimulus though there has been a lack of detail," they said.
Governments and central banks readied more emergency measures to tackle the economic impact of the coronavirus on March 13 as Asian markets suffered their worst weekly crashes since the 2008 financial crisis.
"Central bank meetings dominate next week's economic calendar in Asia. The question is not whether they will cut rates again, but by how much," ING economist Prakash Sakpal said in a separate note.
ING economists expect the People's Bank of China to cut the loan prime rate by another 10 basis points next week.
The COVID-19 disease has now infected almost 135,000 and killed more than 4,900 worldwide, mostly in China, where the coronavirus originated, but the country has been reporting fewer new cases, suggesting the peak of infections there has passed.
Construction steel rebar and hot-rolled coil on the Shanghai Futures Exchange both slipped 0.5%, while stainless steel shed almost 1%. Coking coal rose 0.5% but coke dropped 0.2%.
Iron ore prices in the physical market remained volatile as well, with the benchmark 62% iron ore falling to $90.50/t, after rising to $91.50/t on March 11.
(Writing by Alex Guo Editing by Tammy Yang)
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