Iron ore price extends losses on China’s lower steel output

Iron ore prices dropped further on Friday on weak sentiment amid Beijing’s crackdown on coal prices and lower steel output.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $107.28 a tonne, down 4.4% from Thursday’s closing.
Benchmark iron ore futures faltered 3.6% to 651 yuan a tonne in China.

Production of five main steel products – rebar, hot-rolled coils, wire rod, cold rolled coils and medium plates – at steelmakers tracked by Mysteel consultancy rose 4.9% this week to 9.2 million tonnes. However, it was well below the 10.7 million tonnes weekly output in the year-earlier period.

“Affected by energy consumption controls, environmental curbs during winter heating season and the Winter Olympics… steel supply is expected to be restricted continuously, iron ore demand will be dented in the long term,” analysts with CITIC Securities said in a note.

The country’s top economic planner said initial results after its recent investigation into coal producers showed there was still room for further adjustment of coal prices.