Iron ore down 12%, leaving Vale and steel workers under pressure

Iron ore contracts tumbled, and copper fell to a four-month low amid growing concerns over steel production in China, risks to global growth, and the prospect of reduced stimulus in the US.

Iron ore has accelerated losses this week, and futures in Singapore are down 12%  to the lowest level since December. The devaluation is driven by expectations that Chinese steel production and consumption will decline for the rest of the year, in part due to measures to reduce pollution. Prices are down 40% compared to the record high reached just three months ago.

Metals markets are also pressured by expectations that the Federal Reserve may soon begin to scale back the huge stimulus that helped push prices up over the past year, as well as by the risks of the rapidly spreading delta variant of the coronavirus. Weaker data from the US and China have recently reinforced the perception that the global economic recovery is fading.

Source: Exame.Invest

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