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Iron Ore Reaches New Lows Amid Evergrande Concerns

  • Growing concerns about a deepening liquidity crisis in the Chinese property sector continues to weigh on iron prices, currently trading at their lowest level since June 2020.
  • Part of the plunge in iron ore prices was linked to the government crackdown on the real estate market, which has been a strong buyer of steel.
  • The chart below shows that the collapse in Evergrande ST bonds (March 2022 and June 2025) have coincided with the fall in Iron Ore prices.
  • In addition, the significant deceleration in Chinese economic activity combined with the fall in liquidity (annual change in TSF 12M sum) have been weighing on domestic assets and some China-sensitive commodities in recent months.
  • Pressure remains on the downside for iron ore as Evergrande is expected to struggle to meet its ST obligation in the near term.

Source: Bloomberg/MNI

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