All three iron ore miners opened around -1% lower, in-line with SPI futures and weaker commodity prices after market close last Friday.
The selling has intensified to declines of (at 1:00 pm eastern):
Rio Tinto -4.8%
A post-lockdown China was expected to hit the ground running and make a second-half dash towards its ambitious GDP growth target of 5.5% for 2022.
Reality hasn’t quite matched up with expectations, as the nation continues to double down on its covid-zero strategy.
Headlines might say Shanghai is out of lockdown, however, residents are still required to be tested every week and residential complexes face immediate lockdowns where cases are detected.
On the industrial front, an increasing number of steel mills in China are opting to undertake maintenance and cut output amid weak margins and soft demand for steel, according to ANZ senior commodity strategist Daniel Hynes.
“Inventories of finished steel products are also rising,” noted Hynes.
China’s steel inventories rose by 316,700 tonnes to approximately 22.2m tonnes last week, according to Sinosteel.
China's troubling property market remains a massive risk, even if its no longer making headlines.
A flurry of downgrades for Chinese property developers has pushed a measure of risk levels for debt in Asia to levels not seen since the 2009 financial crisis, CNBC reported.
The most notable metric was the number of companies rated "B3 negative" or lower, which has nearly doubled from last year, to a record high. Perhaps most concerning is the pace of downgrades, issued by ratings agency, Moody's.
Moody's issued 91 downgrades for Chinese property developers in the past 9 months, compared to only 56 downgrades in the 10 years ending December 2020.
The ratings agency expects more Chinese real estate developers to default this year amid tight credit conditions and sluggish property sales.
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