KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Iron ore prices have plummeted to their lowest level since 2022, driven by concerns that global supply is outpacing demand. China's steel industry, which is the largest consumer of seaborne iron ore, is in crisis, leading to reduced steel output and a ripple effect across global markets.
Key Highlights:
Iron Ore Futures Drop: Iron ore futures in Singapore fell below US$94 (RM417.15) per ton on Thursday, marking the fourth consecutive day of decline. The price reached an intraday low of US$93.70, the lowest since November 2022, before stabilizing at US$94.60 by mid-morning.
China's Steel Production Cuts: Data from China revealed that steel mills reduced production to approximately 83 million tons in July, a 9% decrease from the same period last year. As the world's largest importer of iron ore, China's reduced output significantly impacts the global market.
Market Impact: Iron ore is one of the worst-performing commodities of the year, with benchmark prices down by about one-third. The crisis in China's steel industry, highlighted by warnings from China Baowu Steel Group Corp about collapsing product prices, has exacerbated the decline. The slowdown in China's economy, particularly in the property sector, has further weakened steel demand.
Effect on Miners: The ongoing sell-off in iron ore has severely affected miners, with BHP Group Ltd's shares down by more than 20% in Australia this year.
The outlook for iron ore remains bleak as the global steel industry grapples with oversupply, falling prices, and reduced demand, particularly from China, the dominant player in the market.
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