Australia’s number one export, iron ore, has been dragged back into a bear market by weakening steel production and an economic slowdown in China, pushing the price of the bulk commodity back below $US100 ($135) a tonne.
Despite staging a brief rally through September and October to $US135 a tonne, prices have collapsed in the last week as Beijing ramps up pressure on heavy manufacturing activity in parts of the country just three months out from the 2022 Winter Olympics.
In the last week, the price has tumbled more than 20 per cent, falling 7.4 per cent to $US95.77 a tonne on Tuesday alone according to Fastmarkets MB.
“Concerns over the outlook for the Chinese real estate market continue to weigh on the iron ore and steel markets,” said ANZ senior commodity strategist Daniel Hynes.
“China appeared to ramp up efforts to curb steel production, with restrictions now extended into the first quarter of 2022 to ensure less pollution during the Beijing Winter Olympics.”