Iron Ore Falls to 15-Month Low

Iron ore prices tumbled to a 15-month low in early August, reaching just over CNY 700 per ton. This significant drop was largely attributed to a lack of robust policy support from China, the world's largest consumer of the metal. Despite recent discussions of potential stimulus measures, the Politburo refrained from declaring any major new initiatives.

Instead, existing fiscal policies were highlighted as the primary tool for economic support. Experts suggested that targeted measures, particularly in infrastructure spending and select industrial sectors, might be necessary to alleviate the downward pressure. In addition to policy concerns, Chinese steel producers are grappling with shrinking margins.

Meanwhile, the country's steel production has continued its decline as construction activity hit its lowest point since the onset of the pandemic. Private data further indicated that China's manufacturing sector slowed to its weakest pace in four months in July, as both output and new orders grew at a slower rate, adding to the mounting concerns over demand.