The iron ore market in China is under strong downward pressure due to concerns that demand will decrease when the Chinese Government steps up control activities on steel production in the near future to achieve the target of reducing gas emissions. Greenhouse.
Closing the session on February 11, the price of iron ore delivered in September 2021 on the Dalian Trung exchange dropped sharply by 3.7% to 1,163 CNY (equivalent to 179.25 USD)/ton. For the whole week, iron ore futures on DCE fell 1.6%, marking the fourth consecutive week of declines.
The price of iron ore with 62% iron content imported in North China in the session on July 9 reached 214.77 USD/ton, down 1.8% compared to the previous session.
Iron ore futures prices are considered the benchmark price for iron ore in the futures market in China; meanwhile, the CFR iron ore price at Qingdao port is the benchmark price for iron ore in the country’s spot market.
Besides, the price of input materials for steel production on DCE also continued to decrease. In which, the price of coking coal decreased by 1.1% to 1,857 CNY/ton; Coke price fell 1.6% to CNY 2,495/ton.
The iron ore market in China is under strong downward pressure due to concerns that demand will decrease when the Chinese Government steps up control activities on steel production in the near future to achieve the target of reducing gas emissions. Greenhouse. Several large steel mills in eastern China were forced to partially shut down after an inspection by Chinese authorities.
According to financial consulting firm SP Angel (UK), China will need to cut production of at least 50 million tons of crude steel in the last 6 months of this year to meet the target of reducing carbon emissions by 2021.
The data of Mysteel (China) steel market consultancy showed that blast furnace operating capacity of 247 steel mills across China as of July 9 reached 86%, higher than the recorded rate of 81%. received last weekend; However, this capacity level is still lower than the same period last year.
Meanwhile, the iron ore supply of the world’s four largest iron ore miners, Vale, Rio Tinto, BHP and Fortescue is forecasted to increase sharply in the second half of this year as bottlenecks in the ore supply chain increase. iron is removed.
Some analysts predict the iron ore market may fall into oversupply in the second half of this year as demand for iron ore in China weakens. However, China’s tightening of steel production activities may cause steel product prices in this country to increase in the near future, contrary to the goal of curbing raw material prices.
The latest data showed that China’s ex-works price index rose in June slowed as the country stepped up efforts to curb the rise in prices of basic commodities and raw materials.
On the Shanghai Futures Exchange, the price of construction bar steel for delivery in October 2021 increased by 0.3% to 5,428 CNY/ton on July 9; Hot rolled coil price also increased 0.4% to 5,795 CNY/ton. For the whole week this week, prices of construction bar and hot rolled coil in China increased by 5.9% and 7% respectively.
Source: VITIC/Reuters
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