Iron ore prices halted a two-day rebound as Chinese steel prices extended declines amid further government curbs and BHP prepares to start operations at its South Flank mine.
The steelmaking hub of Tangshan announced fresh curbs, including ordering sintering units to stop work from midnight to 10 a.m. from May 18-20, Mysteel reported.
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The move is the latest in a series of measures targeting the city, which last week banned mills from fabricating or spreading price-hike information after Premier Li Keqiang earlier urged China to deal with surging prices.
Benchmark 62% Fe fines imported into Northern China (CFR Qingdao) were changing hands for $216.16 a tonne, down 3.5%, according to Fastmarkets MB.
China will strengthen its management of commodity supply and demand to curb “unreasonable” increases in prices and prevent them being passed on to consumers, the country’s cabinet said on Wednesday, as it urged coal producers to boost output.
The country will step up adjustments on the trade and stockpiling of commodities and reinforce inspections on both the spot and futures markets, as state broadcaster CCTV reported the cabinet meeting chaired by Premier Li Keqiang as deciding.
China said it will crack down on malicious trading and investigate behaviour that bids up prices, according to the report.
The country also urged coal producers to boost output to meet peak demand in summer, the cabinet said. China’s coal production in April fell to its lowest since July 2020.
Reacting to the report, thermal coal futures on the Zhengzhou Commodity Exchange plunged as much as 7.9%.
On the Shanghai Futures Exchange, steel rebar and hot-rolled coil dived around 6%, while base metals such as copper were also in the red.
BHP’s South Flank iron ore project in Western Australia will announce first production in the next few days, Chief Executive Officer Mike Henry said on Tuesday.
“In the next few days, we will announce the first production at the 80 million tonnes per annum South Flank iron ore project, with its higher grade and lump fraction,” Henry said.
South Flank is BHP’s preferred option to replace the 80 million tonne-a-year Yandi mine, which is reaching the end of its mine life.
The project is expected to create 2,500 construction jobs, more than 600 operational roles and generate opportunities for Western Australian suppliers. The mine is expected to produce iron ore for more than 25 years.
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