Iron-ore’s rout keeps rolling as China imposes more steel curbs
Iron-ore extended its slump below $100 a ton as China stepped up restrictions on industrial activity in some provinces.
Prices have collapsed about 60% since a record in May, with futures trading below three figures for the first time in more than a year, as steel production curbs hammer demand. China is seeking to cut output this year to reduce greenhouse-gas emissions as it pushes forward with its vow to be carbon neutral by 2060, while more recent restrictions have focused on improving air quality for the Winter Olympics next year.
Measures are already showing signs of taking effect. Production declined in early September after a falling to a 17-month low in August.
“We anticipate another decline in weekly Chinese steel production numbers, which will undermine iron ore prices once again,” said Atilla Widnell, managing director at Navigate Commodities. Weekly shipments from Australia are also higher week-on-week, and Brazil’s exports have been strong, he said. The research firm has a short-term target of $94.41 to $98.28 a ton.
In the latest round of measures, mills in Jiangsu province have received instructions to reduce production as part of broader curbs on industrial activity aimed at lowering power usage, Mysteel reported, citing its survey of operators. The cuts are concentrated between now and Oct. 15 and focused on construction steel. Producers in Zhejiang province are also being asked to limit operations until Sept. 30. Calls to Jiangsu and Zhejiang’s provincial information departments weren’t answered on a public holiday.
China’s moves to rein in its mammoth steel industry have roiled ferrous markets this year, with iron ore spiking in the first half as mills rushed to front-load their steel volumes ahead of more production restrictions being rolled out. Prices are also being buffeted by a downturn in the property sector and concerns that tumult at developer China Evergrande Group may further weigh on a crucial source of demand for steel and metals.
Futures in Singapore briefly sank more than 11% before trading 5% lower at $96.60 by 10:51 a.m. local time. Prices are down for a ninth day, heading for the longest run of losses since 2015. Markets in China are shut for a holiday.
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation