- Iron ore futures in China drop over 4.0%, down for the second consecutive week.
- Pollution control, covid woes weigh on the metal prices.
- AUD/USD cheers USD pullback but bears remain hopeful.
Iron ore futures on the Dalian commodity exchange drop over 4.0% on a day to $125.70 amid early Friday. In doing so, the metal adds to the 9.0% weekly south-run, not to forget mentioning the second week of fall.
Although fresh fears that the Delta covid variant challenges the global economic recovery weigh on the commodity prices in general, China’s latest pollution control measures seemed to have weighed on the iron ore prices.
“The China Iron and Steel Association said in a statement this week mills that are more polluted or consume high energy should lower steel production. It also pledged to ensure that 2021 steel output will fall on an annual basis,” said Reuters. The news also cites data from Mysteel consultancy while saying, Capacity utilization rates of blast furnaces at 247 mills across China recovered slightly to 85.89% this week but still well below 95.16% the same period a year earlier.”
It’s worth noting that iron ore is the largest export item for Australia and hence the commodity’s weakness weighs on the AUD/USD prices. However, the latest pullback of the US dollar seems to restrict the Aussie pair’s immediate moves around 0.7340.
Read: AUD/USD struggles inside a choppy range below 0.7350 amid subdued markets
It should be observed that fears of monetary policy consolidation by the People’s Bank of China and downbeat economics from the dragon nation also keep iron ore bears hopeful. Even so, the metal traders will keep their eyes on Monday’s China Industrial Production and Retail Sales figures for fresh impulse.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD remained bid above 0.6500
AUD/USD extended further its bullish performance, advancing for the fourth session in a row on Thursday, although a sustainable breakout of the key 200-day SMA at 0.6526 still remain elusive.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.