Iron ore stops two day gain as steel slips, BHP mine is open; copper sinks
Singapore iron ore futures halted a two-day rebound as Chinese steel prices extended their decline amid a further government slowdown and the BHP Group prepares to start the market. one of the biggest new mines in the world.
BHP’s South Flank iron ore project in Western Australia will announce first production in the coming days, CEO Mike Henry said on Tuesday. That will end up adding 80 million tonnes of annual supply to what he called a “perfectly timed” moment, as prices are near record highs.
The ore is holding above $ 200 a tonne despite the crazy price swings of the past week, as investors watch the strength in Chinese steel markets and a push from Beijing to cap commodity prices. Steel prices are weakening, with rebar and hot-rolled coil both resuming falls from historic highs.
Also on Wednesday, the Tangshan Steel Center announced new curbs, including ordering sintering units to stop work from midnight to 10 a.m. from May 18 to 20, Mysteel reported. It is the latest in a series of measures targeting the city, which last week banned factories from manufacturing or disseminating information about the price hikes after Premier Li Keqiang urged China to deal with the soaring prices.
Singapore futures fell 4.2% to $ 205.10 per tonne at 3:25 p.m. local time, while futures on the Chinese Dalian Exchange closed down 4%.
Iron ore hit a record high this month amid expanding steel markets in China and a rebound in global demand for steel. Investors are watching for any signs that high prices are stimulating a supply response from previously unprofitable mines. China said on Tuesday it would encourage more domestic production to stabilize the market.
Copper prices fell 3% as rising inflation made investors feel risk-free, offsetting the impact of potential supply disruptions in America’s premier producing region. South.