Iron ore prices tumbled on Friday, collapsing under the weight of China’s resolve to reduce steel output in line with its decarbonization drive, and slowing domestic demand for the construction and manufacturing material.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $181.57 a tonne, down 7.6% from Thursday’s closing, the lowest since April.
Iron ore on China’s Dalian Commodity Exchange closed daytime trading 8.1% lower at 1,027 yuan ($158.95) a tonne, with its monthly loss of nearly 8% the steepest since February 2020.
Spot iron ore traded below $200 a tonne on Thursday for the first time since May 28, SteelHome consultancy data showed.
“Prices fell as iron ore demand weakens in the face of policy to reduce China’s steel output as a means to cut emissions,” Commonwealth Bank of Australia commodities analyst Vivek Dhar said in a note.
China has asked mills to limit this year’s output to no more than the 2020 volume after the first-half production grew nearly 12% compared with a year earlier.
