IRON ORE, the main ingredient in steel production, continued its free fall yesterday as China applied the brakes to steel production as part of reducing carbon emissions.
Prices for iron ore cargoes with a 63.5 percent iron content decreased by 3.75 percent to $167 (about R2 474) a ton, the lowest level since early April on weak seasonal demand and as some Chinese steel producers were told to cut output.
Commenting on the slump in iron ore prices, Kumba Iron Ore’s executive head of marketing, Timo Smit, said the seasonal slowdown, combined with further steel production cuts in China, had put pressure on prices.
“The authorities have signalled their intent to limit 2021 production at 2020 levels. This would imply a significant reduction in the second-half steel production, given the strong growth seen in the first half of the year,” said Smit.
China, which is responsible for a quarter of the world’s greenhouse gas emissions, told steel producers in several provinces to limit their production to 2020 volumes in a push to curb carbon emissions. In addition, China raised export tariffs on some steel materials and removed rebates on cold-rolled products.
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