Seaborne iron ore prices slipped on Tuesday as Covid-19 continues to spread in China. When the country returns from its Labour Day holiday later this week, more cities may be under lockdown than when the holiday began.

The Kallanish KORE 62% Fe index fell $0.58/t to $141.73/dry metric tonne cfr Qingdao. The Kallanish KORE 65% Fe index dropped $0.72/t to $166.42/dmt cfr, and the KORE 58% Fe index dipped $0.10/t to $126.90/dmt cfr.

The Dalian Commodity Exchange remained closed on Tuesday, but on the Singapore Exchange, June 62% Fe futures settled down $3.09/t at $143.68/t. The same contract for 65% Fe and 58% Fe futures settled down $3.19/t at $166.76/t, and down $2/t at $130.32/t respectively.

Zhengzhou, an important city for several commodities such as thermal coal, went into lockdown on Tuesday evening. Case numbers have also been building in Beijing and much of the city is undergoing regular testing and movement restrictions, although the city has so far avoided a city-wide lockdown.

Chinese markets will re-open open on Thursday. So far, government stimulus announcements have only been enough to prevent a price collapse, but have yet to influence real demand. Faith in China’s ability to stimulate its way out of a crisis will be a key driver of sentiment when traders return.