Believed in Central Gyeonggi Recovery... Fear of Recession Returns Due to Raw Material Price Drop

Iron Ore Down 23% from March Peak
Copper and Crude Oil Prices Also Fall
Concerns Over Global Economic Sharp Slowdown Spread

The pace of China's economic recovery is slower than expected, causing prices of major raw materials such as iron ore to decline. Doubts about the effect of China's reopening (economic reopening) have resurfaced concerns about a global economic slowdown.

According to the international commodity market on the 10th, the price of iron ore delivered to Qingdao Port in China fell to $102.7 per ton last week, down 23% from the March peak.

Major foreign media analyzed that China's economic rebound was below market expectations. Iron ore prices move according to demand from China, the world's largest consumer. After the reopening at the end of last year, iron ore prices surged sharply.

The growth in the construction sector, which accounts for half of China's steel demand, remains sluggish. New real estate starts in China in March decreased by 29.1% compared to a year earlier. Automobile demand, which accounts for 10-15% of China's steel consumption, is also showing signs of slowing. A Hong Kong-based commodity trader said, "Steel demand began to slow from early last month," adding, "The market expected steel demand to increase by 10% this year, but even with the most optimistic view, it will only increase by 2%."

China's economy is struggling to gain momentum. The previous day, China's customs authority, the General Administration of Customs, announced that China's imports in April recorded $205.21 billion, down 7.9% year-on-year. China's import statistics are considered an indicator to gauge the economic recovery after reopening. If imports had increased, it could have been judged that domestic demand and the economy were recovering, but the decline dampened market expectations.

China's Caixin Manufacturing Purchasing Managers' Index (PMI), a leading economic indicator, also fell from 50 in March to 49.5 in April, entering a 'contraction phase (below 50).' With consumer sentiment failing to revive, the manufacturing economy has also frozen. China's first-quarter gross domestic product (GDP) growth rate exceeded expectations at 4.5%, but concerns about sustainability are growing.

Accordingly, prices of other raw materials such as copper and crude oil are also falling besides steel. Copper, known as 'Dr. Copper' as an economic barometer, recorded $3.92 per pound on the New York Mercantile Exchange on the 8th, down 8.2% from the January peak ($4.27). Oil prices, which were expected to surpass $100 this year, are also declining. On the 9th, West Texas Intermediate (WTI) crude oil for June delivery closed at $73.7 per barrel, down 11.5% from the April peak ($83.26).

One foreign media outlet evaluated, "The decline in raw material prices such as iron ore is evidence that China's economic rebound after the lifting of COVID-19 lockdowns is faltering," adding, "This raises questions about the sustainability of China's economic recovery as optimism and economic activity slow after the lifting of COVID-19 lockdowns."

This content was produced with the assistance of AI translation services.