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.
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)