Mining

Iron ore price tumbles on weak Chinese demand concerns

The country, which accounts for more than half of the world’s steel output, has also shut down numerous small and low-quality iron ore mines and will continue to raise its bar on ore quality to match its environmental standards.

Source: Fastmarkets – Global Iron Ore 2021

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China (CFR Qingdao) were changing hands for $157.01 a tonne, down 4.38% from the previous trade.

The most-traded May iron ore on China’s Dalian Commodity Exchange ended the daytime session 5.9% lower at 1,004.50 yuan ($154.35) a tonne.

On the Singapore Exchange, the front-month April contract was down 2% at $151.10/tonne by 0718 GMT.

Dalian coke tumbled 7.3% to 2,131 yuan/tonne. Dalian coking coal shed 3.9% to 1,547.50 yuan/tonne.

Iron ore reached its highest level since September 2011 in mid-January, but has since declined 9.7%

“We think the next three years could be marked as ‘Supply-side reform 2.0’, during which time we should see accelerating policy changes limit production growth in the industry – this time due to tightening environmental regulations,” analysts at JP Morgan wrote in a note Reuters reported.

“The spectre of further restrictions on the real estate market (is) also weighing on sentiment,” ANZ commodity strategists told Reuters.

ANZ cited a 7.6% year-on-year growth in property investment in China in January-February, coinciding with “an increased focus on containing asset price bubbles”.

(With files from Reuters)

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