Iron ore has reached “unreasonable” levels that are hurting Chinese steel mills, according to China Mineral Resources Group, the state-backed firm trying to boost Beijing’s sway over prices.
Elevated costs are squeezing margins at steelmakers in the world’s top producer, Guo Bin, CMRG’s president, said at an event in Shanghai during the China International Import Expo. There needs to be more effort to “improve” pricing systems for raw materials, Guo said.
Iron ore futures in Singapore notched their highest close since March on Monday in a rally largely powered by surprisingly resilient Chinese steel output. The global iron ore market is in deficit and more price gains are coming, Goldman Sachs Group Inc. said in a note on Tuesday.
While it’s far from unusual for Chinese steel officials to bemoan rising iron ore prices, the comments come at a sensitive time for miners like Rio Tinto Group and BHP Group Ltd. CMRG was established last year with the aim of centralizing iron ore imports and raising China’s heft against global mining giants.
Read More: Iron Ore Falls From Highest Since March as China Demand Eyed
Futures in Singapore fell 0.8% to $122.10 a ton at 9:55 a.m. local time, dropping for a second consecutive day. Prices in Dalian slid 0.7% after the exchange tightened trading limits on Monday for the second time in two weeks.
