NewsIron ore price hits 10-year high on rising steel demand - YGL Ibay

April 19, 20200

MINING.COM Staff Writer | April 16, 2021 | 9:40 am Intelligence Markets News Australia China Latin America Iron Ore 

Iron ore price hit 10-year high on rising steel demand

                                     Steelmaking process. (Image by China Baowu Steel)

Iron ore prices continued to climb on Friday despite concerns over environmental restrictions in China.

Tangshan, China’s top steelmaking city, said last month it will punish firms that either have not taken the steps spelled out under its emergency anti-pollution plan or have illegally discharged pollutants, following weeks of heavy smog in northern China.

According to Fastmarkets MB, Benchmark 62% Fe fines imported into Northern China (CFR Qingdao) were changing hands for $178.43 a tonne on Friday – the highest level since 2011.

The high-grade Brazilian index (65% Fe fines) also advanced to a record high of $211.10 a tonne.

“Steel margins in China are very attractive at the moment, so even with the restrictions in Tangshan, other producers have every incentive to try to increase operating rates,” ING head of commodities strategy Warren Patterson told the Financial Review.

“Stronger margins, along with more focus on reducing emissions, has also proved supportive for higher-grade iron ore demand. This is reflected in the quality premium, which has widened recently,” Patterson said.

“Despite talk of nationwide inspections, we believe other regions will ramp up, particularly given the spike in steel margins,” JPMorgan analyst Lyndon Fagan said.

According to IndexBox, global steel consumption is forecast to increase in 2021 by 4.1% year-on-year.

Prices have also been fueled by falling supplies from major miners.

Goldman Sachs expects the market to enter a surplus in the second half of the year on higher Brazilian exports, bank analysts wrote in a note, adding they see prices falling back to $110 a tonne by the fourth quarter and below $100 in 2022.

(With files from Bloomberg and Reuters)

Available From: https://www.mining.com/iron-ore-price-hit-10-year-high-on-rising-steel-demand/

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