News: RIO Iron ore dips as gloom grips global ferrous market

Dalian iron ore sank deeper on Thursday, while benchmark prices of the steelmaking ingredient in Singapore hovered near 2022 lows, hammered by a gloomy outlook for global steel demand and supply-side pressures.

Steel prices in China, which accounts for about half the world's output of the construction and manufacturing material, also fell amid a worsening COVID-19 situation in Beijing.

The most-traded January iron ore on China's Dalian Commodity Exchange DCIOcv1 ended morning trade 2.5% lower at 670.50 yuan ($92.58) a tonne, after touching its weakest since Sept. 5 at 670 yuan.

On the Singapore Exchange, the benchmark November iron ore SZZFX2 contract was down 1.5% at $90.65 a tonne by 0348 GMT, near its 2022 low of $90.30 hit on Tuesday.

The World Steel Association now expects a 2.3% contraction in global steel demand this year, revising its forecast from a 0.4% growth.

The Brussels-based group said the global economic environment has deteriorated significantly, citing high inflation and interest rate hikes, and China's slowdown due to its zero-COVID policy and property sector downturn.

"The slump in the property market has deepened, with investment in real estate slowing to its worst in 30 years," the group said in a report on Wednesday.

"Despite the government's efforts to boost the real estate market, a major turnaround is not expected since buyers' confidence remains weak due to strict COVID-19 measures and developer bankruptcies."

Supply-side pressures intensified. This week major miners BHP Group (BHP) and Vale SA VALE3.SA reported higher quarterly iron ore production, while Rio Tinto (RIO) RIO.L posted a 4% quarter-on-quarter rise in shipments.

Rebar on the Shanghai Futures Exchange SRBcv1 fell 1.2%, hot-rolled coil SHHCcv1 dipped 0.9%, wire rod SWRcv1 shed 0.5%, while stainless steel SHSScv1 rose 1.6%.

Other steelmaking inputs also dropped, with Dalian coking coal DJMcv1 and coke DCJcv1 down 1.7% and 2.2%, respectively.