Iron ore prices in China fell after four consecutive sessions of gains as demand for steel in the country showed signs of decline and investors worried about market interventions by the Chinese government.
Closing the session on June 29, the iron ore price for September 2021 delivery on the Dalian Commodity Exchange (DCE) fell 2.7% to 1,153 yuan (equivalent to 178.57 USD)/ton, ended the uptrend that lasted 4 sessions in a row before.
Prices of imported 62% iron ore in northern China (CFR price at Qingdao port) also fell 2.7% to $212.33 per tonne, according to market research firm Fastmarkets MB data. (Brother).
Although the spot price of 62% iron ore is still anchored above the $200/ton threshold, the current price is down 5.2% from the all-time high of $232.50/ton set on December 12. May 2021. The price of iron ore on the futures market on DCE has also decreased by 15.1% in recent times.
Iron ore prices are under downward pressure as steel demand in China tends to decline as weather conditions become more unfavorable for construction activities. Steel market consulting firm MySteel (China) said spot steel prices on the Chinese market continued to decline in the session on June 28.
MySteel data shows that the trading volume of steel products for construction activities such as steel bars and wire rods of 237 steel traders in China decreased by about 9% on June 28 due to weather conditions. Hot and humid weather slows down construction activities.
Besides, investors are also worried that “market interventions by Chinese authorities” will reduce speculative demand and hoarding of iron ore and steel. Last week, China’s market control authorities inspected spot transactions at the Beijing Iron Ore Exchange and said they would closely monitor price movements and investigate speculative activities. price manipulation.
Economist Howie Lee of OCBC Banking Group (Singapore) said that iron ore prices may fall in the next six months as the Chinese government steps up market intervention.
However, Mr. Howie Lee warned that iron ore prices could also skyrocket up to 250 USD/ton if trading firms and steel producers in China step up their purchases in the context of iron ore inventories in the country. is on a strong downward trend.
The data showed that the amount of imported iron ore stored at China’s ports fell for the fourth week in a row, to just 123.95 million tonnes – the lowest level since October 2020. In recent times, iron ore supplies from Australia and Brazil have declined due to supply chain bottlenecks and mining problems.
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