Steel prices in China fell after the Chinese government’s move to investigate speculation in iron ore, the main raw material in the steel production process. Ore prices fell immediately after China’s move.
Iron ore prices in China fell for a second straight session, reducing their year-to-date gain to 31%, from more than 50% previously. Beijing is planning to step up inspection of the commodity market to prevent speculation and hoarding. In the session of June 22, there was a time when the price of iron ore for September futures on the Dalian bourse fell 5.2% to 1,110 CNY (equivalent to 171.75)/ton, the lowest level in two weeks. At the end of the session, this contract recovered slightly, but still fell 2.7% from the previous session’s closing, closing at 1,139 yuan/ton. The price of iron ore 62% imported for immediate delivery at China’s seaports in the previous session (June 21) also decreased by 7 USD to 210.5 USD/ton. Prices of steel products in this session fell simultaneously. Accordingly, October rebar fell 2.1% to 4,885 yuan/ton, the lowest closing price since May 27; hot rolled coil decreased 2.4% to 5,153 yuan/ton; stainless steel for July delivery alone increased 2.1% to 16,435 yuan/ton. According to a report by the World Steel Association (Worldsteel), global crude steel production in May 2021 increased by 16.5% over the same period last year, to 174.4 million tons. In which, Africa’s production increased by 65.1% compared to May 2020, to 1.3 million tons. Production in Asia and Oceania increased by 11.7% to 128.4 million tons. Meanwhile, 27 EU countries produced 13.5 million tons, up 32.7% and Middle Eastern countries produced 3.7 million tons, up 16.8%. China – a country in the group of 10 largest producing countries in the world, has an output of 99.5 million tons, up 6.6% over the same period last year. India and the US produced 9.2 million tons and 8.4 million tons respectively, up 46.9% and 47.6% compared to May 2020.
Source: VITIC/Reuters
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