12:25 PM EDT, 09/05/2024 (MT Newswires) -- RBC Capital Markets in a Wednesday note said China's economic slowdown is cutting into demand and prices for iron, while metallurgical coast is also weakening.

"Iron ore prices fell -0.5% last week and opened -1.1% lower today on disappointing Chinese economic data and global steel production numbers. Concerns about China's economic health heightened following data that revealed growth within its services sector moderated in August. Additionally, China's official manufacturing PMI registered at 49.1 in August, below consensus of 49.5 and the July figure of 49.8. In contrast, China's Caixin PMI - which gives insight into private and export-oriented businesses - came in at 50.4, inching above consensus of 50 and the July figure of 49.8. However, steel industry PMI fell to 40.4 in August (vs. 42.5 in July), with new orders and output experiencing significant reductions (Bloomberg). The announcement of a one-month environmental

inspection in Tangshan, responsible for 15% of China's crude steel production, is expected to further suppress steel output and iron ore demand. Met coal prices remained stable w/w but opened -1.0% lower today as steel demand continues to contract in China and India, with limited October procurements for India contributing to investor concerns (CRU). World crude steel production fell -4.7%

y/y in July, driven by a -9.0% reduction in Chinese output while the rest of the world managed a 0.9%

increase (WSA)," analyst Sam Crittenden noted.