Steel prices today fell to 4,766 yuan/ton on the Shanghai Exchange. China is stepping up its intervention in the iron ore market by establishing a single, state-backed platform for bulk purchases.
Steel price today on Shanghai Exchange
Steel price today delivered in May 2022 on the Shanghai Exchange fell 54 yuan to 4,766 yuan/ton at the time of the survey at 9:50 am (Vietnam time).
| Type name | Period | February 23 | Difference from previous transaction |
| Copper price | Delivery in April 2022 | 71.280 | +120 |
| Zinc price | Delivery in April 2022 | 25.085 | +250 |
| Nickel price | Delivery in April 2022 | 176.770 | -1.170 |
| Silver price | Delivery in July 2022 | 4.971 | +31 |
| Steel price | Delivery in May 2022 | 4.766 | -54 |
List of futures trading prices of some metals on the Shanghai Exchange (Unit: yuan/ton). Summary: Thao Vy
China is stepping up its intervention in the iron ore market by setting up a single, state-backed platform for bulk purchases, according to the Australian Financial Review.
Iron ore chart at Shanghai Exchange (Source: Shfe)
On Tuesday (February 22), Bloomberg reported that Beijing was planning to let global suppliers negotiate to sell iron ore to China through a platform currently being prepared.
The plan is part of a growing effort by China to cool iron ore prices, which have been fueled by speculation and hoarding, and broadening scrutiny in the markets. goods.
“The effects from this move could be wide-ranging,” said Tyler Broda, Mining Sector Analyst at RBC Capital Markets.
“Centralization and coordination will likely shift the marginal value to China, except when there is a material deficit in the market, which we do not forecast until 2026.”
Spot iron ore prices are largely determined by market data capture agencies such as S&P Global Platts. The long-term contract will be based on average spot prices over agreed time periods, such as monthly or quarterly.
Strategists suggest that the motive for creating a centralized platform is to track the factors behind price movements and give steelmakers a better idea of how much they have to pay.
Photo: London Metal Exchange
China’s steel industry has complained that large miners hold too much pricing power, especially since the country accounts for about 75% of the world’s imported iron ore.
But this power is rarely consolidated because of the fragmented nature of China’s steel sector – where there are many small mills, as opposed to the supply side – where there are fewer large sellers.
While yet to be rolled out, the proposed platform could mark a shift in pricing power in favor of steel mills, as the sector consolidates through an expected increase in steel mills. mergers and acquisitions.
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