In July this year, iron ore production in China reached 79.929 million tons, an increase of 4.9% over the same period last year. But its monthly production trend has been declining. Statistics show that the monthly production of iron ore has decreased by 9.04 percent. In the following, we will evaluate this issue. Please be with Artan Press.
*** Decreased iron ore production and falling prices
The price of imported iron ore began to decline in July. The highest level in July was $ 221 per ton. The lowest level in this month was observed on January 30-31 at $ 180 per ton CFR. Prices fell sharply in August. The drop comes as the central government announced its goal of reducing crude steel production. It also announced a significant drop in futures prices for ferrous metals.
*** One percent drop in iron ore over the past six months
According to the National Statistics Office of China (NBS), in the period from January to July this year, China’s iron ore production amounted to 570.18 million tons, an increase of 14.5 percent over last year. On a larger scale, the production of this product has recorded a decrease of 1.4 percent compared to the same period in the first six months of 2021. As previously reported by Steel Orbitz, China’s iron ore imports fell 1.5 percent year on year to 649.025 million tons between January and July. In July alone, China imported 88,506 million tonnes of iron ore, down 21.4 percent from a year earlier.
*** Iron ore under pressure from China policies
Singapore Stock Exchange futures data show that iron ore prices continue to fall due to China’s policies to reduce steel production. According to the report, 62% of China’s iron ore prices in September lost $ 140 on futures trading on the Singapore Stock Exchange. It buys $ 139 so far.
*** Hard days of global iron ore trading
This week was perhaps one of the worst days of 2021 for global iron ore producers. In trading on the Singapore Stock Exchange, Iron Ore lost $ 160 and $ 150 support, respectively. At the end of the week, it even touched $ 130, but again reached $ 140 per ton. The main reason for the fall in iron ore prices is production restrictions in China and doubts about the future of the global economy with the expansion of the new corona. China produced 86.79 million tonnes of crude steel last month, down 7.6 percent from June, according to the National Bureau of Statistics (NBS).
*** Average daily iron ore production in China
China’s average daily steel production last month was 2.8 million tons. This is down 11 percent from 3.13 million tons a day in June. This decline in production has increased inventories in China; On the other hand, we are witnessing a strengthening of supply. Brazil’s iron ore shipments have risen 7 percent year on year in the last three months. Accordingly, Vale has increased iron ore production. It is estimated that by the end of 2021, from the current level of about 325 million tons to 343 million tons. Strengthening supply along with weak demand has helped lower iron ore prices further.
*** New Corona Strain and Steel Supply Chain Crisis
On the other hand, the new corona strain and its prevalence in China and other countries have also raised concerns. As far as Business Insider writes, iron ore prices this month are facing concerns over the Corona crisis. Iron ore prices fell 62 percent in August by about 26 percent. This figure has been traded at more than $ 156 per ton and has reached a level. Not seen since February. This downward slope comes after metal prices have risen since March 2020. It fell as US stocks plummeted as the Corona epidemic threatened a global recession.
*** Future downtrend of iron ore
China’s steelmaking horizon continues to decline, with the Commonwealth of Australia estimating that China’s crude steel production will fall by about 12.2 percent from August to December 2021 to meet its greenhouse gas emissions target of 2020. In addition to declining production, the situation of the Delta and even more dangerous Lambda is still unclear, a situation that could lead to further declines in iron ore prices on the world market.
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