STEEL NEWS

Iron ore continues to grow in China due to steel demand

Iron ore futures rose on Friday April 23rd for a fifth straight week, according to Mining.com, as reduced steel production in China and stronger global steel demand pushed record prices.

According to Fastmarkets MB, spot prices for 62% Fe ore delivered to North China (CFR Qingdao) were at $ 186.25 a tonne on Tuesday, up 1.43% from the previous day.

The September iron ore on China's Dalian Mercantile Exchange closed its day trading up 1.2% at 1,104.50 yuan ($ 170.11) a tonne. The most active contract this week is up 4.3%.

Iron ore prices climbed to a 10-year high this week after Vale, Rio Tinto and BHP released disappointing production data.

Some supply risks emerged in Brazil yesterday when the environmental authority ordered Vale to suspend operations at its Ilya da Guaiba export terminal in Rio de Janeiro state due to permit violations, but a few hours later another agency gave the green light to continue.

Vale has maintained its annual forecast of 315-335 million tonnes, although it is close to the lower limit, ”said Sharon Mustri, analyst at BloombergNEF. "This means that prices may continue to rise and the shipping market may not meet strong demand from China."

Steel futures in China hit new highs as investors gauged the country's commitment to cut production with its strong demand.

Construction rebar rose 1.7% to 5,299 yuan ($ 816) a tonne in Shanghai, just below the record 5,300 yuan.

Hot rolled coil used in car bodies and home appliances rose 0.9% to 5,590 yuan ($ 861.13) a tonne, after a record peak of 5,597 yuan.

“This is a classic cycle of a bull market for steel,” analysts at J.P. Morgan. "As the world, with the exception of China, emerges from the pandemic and responds to stimulus measures, demand is recovering at a rapid pace."

Following the restrictions imposed on the largest steelmaking city of Tangshan, Handan City in the Chinese steel industry in Hebei Province will implement production control measures in its steel and coke industries from April 21 to June 30, state agency China Metallurgical News reported.

Increased steel prices have boosted the profitability of Chinese mills, prompting them to increase production and purchases of iron ore.