Iron ore price recedes as steel slips and BHP shifts into high gear at South Flank
The move is the latest in a series of measures targeting the city, which last week banned factories from manufacturing or disseminating information about the price hike after Premier Li Keqiang urged China to deal with the soaring prices.
Benchmark fines of 62% Fe imported into northern China (CFR Qingdao) changed hands to $ 216.16 per tonne, down 3.5%, according to Fastmarkets MB.
China will step up its management of supply and demand for raw materials to curb “unreasonable” price increases and prevent them from being passed on to consumers, the country’s cabinet said on Wednesday, as it urged charcoal producers to increase their production.
The country will step up adjustments on trade and storage of commodities and step up inspections in spot and futures markets, as state broadcaster CCTV reported that the cabinet meeting chaired by Premier Li Keqiang was decisive.
China has said it will crack down on malicious transactions and investigate behavior that drives prices up, according to the report.
The country has also urged coal producers to increase production to meet peak demand in summer, the cabinet said. China’s coal production in April fell to its lowest since July 2020.
In response to the report, thermal coal futures on the Zhengzhou Commodity Exchange plunged as much as 7.9%.
On the Shanghai Futures Exchange, steel rebar and hot-rolled coil dipped around 6%, while base metals such as copper were also in the red.
BHP’s South Flank iron ore project in Western Australia will announce first production in the coming days, CEO Mike Henry said on Tuesday.
“In the coming days, we will announce the first production of the southern flank iron ore project of 80 million tonnes per year, with its higher grade and lump fraction,” said Henry.
South Flank is BHP’s preferred option to replace the 80 million tonne per year Yandi mine, which is nearing the end of its life.
The project is expected to create 2,500 construction jobs, over 600 operational positions and generate opportunities for suppliers in Western Australia. The mine is expected to produce iron ore for more than 25 years.
(With files from Reuters and Bloomberg)