en.Wedoany.com Reported - Affected by weakening demand from China's steel industry, iron ore prices recorded their largest single-day drop in nearly two months on Thursday. Steel profit margins have narrowed, and steel consumption has weakened amid high raw material costs.

The main contract of iron ore futures on the Dalian Commodity Exchange closed down 1.85% at 767.5 yuan ($113.32) per ton, marking the biggest single-day decline since April 9 and the lowest price level since April 16.

The July iron ore futures contract on the Singapore Exchange was trading at $101.75 per ton as of 8:00 GMT, down 1.84%, hitting its lowest point since March 9 and the largest single-day drop since April 9.

Analysts pointed out that high coal prices have led to declining steel mill profits, increasing the risk of steel production cuts, which could reduce demand for iron ore.

Stephen Yu, a senior analyst at consulting firm Mysteel, said that steel demand has, to some extent, begun to feel the impact of higher inflation triggered by soaring energy prices.

According to Mysteel data, the apparent consumption of China's five major steel products fell 3.1% from the previous week, following a 0.5% decline the week before.

Steel prices on the Shanghai Futures Exchange showed volatile trends. Among them, rebar fell 0.57%, hot-rolled coil dropped 0.44%, wire rod declined 0.56%, and stainless steel decreased 2.42%.

Coking coal and coke prices, supported by reduced supply, rose 4.34% and 2.28%, respectively.

An analysis report from Galaxy Futures suggested that supply reductions are inevitable. In addition to coal mine suspensions, attention must also be paid to the regulation of off-balance-sheet production capacity, which could significantly impact prices and provide momentum for price increases.

At the end of May, a coal mine safety accident in Shanxi Province resulted in at least 82 deaths, leading to tightened safety inspections and the suspension of many coal mines. This factor has provided support for coal prices.

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