Iron ore price fell to an annual low on Friday amid fears of further cuts in steel production in China.
The best-selling January contract for iron ore on the Dalian Commodity Exchange ended in daily trading 0.3% lower at 732.50 yuan ($ 113.66) a tonne. It climbed to 717.50 yuan a ton on Thursday, the lowest since February 4.
According to Fastmarkets MB, the 62% iron benchmark imported into North China changed hands at $ 129.71 a tonne, down 0.4% from Thursday's close.
“For a couple of months, iron ore prices were volatile, but by the end of August it became clear that there was a quantitative shift in the market, forcing us to revise our year-end forecast from $ 175 per tonne to $ 125 per tonne,” Westpack said. senior economist Justin Smirk.
China has pledged to limit crude steel production this year to no higher than 2020 to limit industrial pollution. But news of possible further restrictions shook the market.
In Jiangsu, China's second-largest steel province, a campaign to monitor energy consumption by industrial enterprises, including steel mills, has raised concerns about further blast furnace disruptions, consultancy Mysteel reported.
In August, manufacturing activity in China declined for the first time in nearly 1.5 to 2 years, as COVID-19 containment measures, supply bottlenecks and high raw material prices weighed on production volumes, hitting the economy.
