The iron ore price fell again on Monday after China’s
steel-producing province Yunnan asked local mills to adjust production
schedules while ensuring that its 2021 crude steel output falls.
According to Fastmarkets MB, benchmark 62% Fe fines imported into
Northern China were changing hands for $123.84 a tonne, down 4.6% from Friday’s
closingTop of FormBottom of Form
Part of the planned September
crude steel production would be postponed to the last two months of the year,
according to a government document.
The province, which makes about
2.3% of China’s total crude steel, has been missing energy consumption targets
and suffering from power shortages. Yunnan also ordered its aluminum smelters
to keep average monthly output for September-December at August volumes or
lower and the cement industry to cut September production by more than 80% from
August.
China has vowed to limit crude
steel output this year at no higher than its 2020 production to curb industrial
pollution.
The most-traded January iron ore
contract on the Dalian Commodity Exchange ended daytime trading 0.3% lower at
732.50 yuan ($113.66) a tonne. It touched 717.50 yuan a tonne on Thursday, the
weakest since February 4.
Iron ore futures in Singapore are
down about 45% from a peak set in May.
“Iron ore prices have had a
volatile couple of months but as August closed, it was clear there had been a
quantum shift in the market leading us to revise down our year–end forecast
from $175/tonne to $125/tonne,” said Westpac senior economist Justin Smirk in a
recent note.
Mining.com