Iron ore price down on fears of regulatory controls

Iron ore prices continued to fall on Tuesday after new steel curbs in China.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $121.67 a tonne, down 1.6% from Monday’s closing. Stainless steel futures on the Shanghai bourse ended 2.2% lower at 19,010 yuan a tonne. Benchmark iron ore futures on the Dalian exchange were down 1.5% to 711 yuan a tonne.
China’s southwest Yunnan province asked local producers to restrict output on steel, aluminum and other materials. Part of the planned production in September would be postponed to the last two months of the year.

The province, which produces about 2.3% of the nation’s total crude steel, is the latest to be targeted as the country steps up its blue skies campaign aimed at reducing air pollution for the Beijing Winter Olympic Games in February.

“We’ve been here before with China trying to ensure blue skies leading into the 2008 Beijing Summer Olympics where we saw iron ore prices pull back quite a lot,” senior economist at Westpac, Justin Smirk, told the Financial Review.