Iron ore prices fell sharply on Wednesday amid renewed expectations of a cut in crude steel production in China by the end of the year.
According to Fastmarkets MB, a benchmark Fe fraction of 62% imported into North China changed hands at $ 143.43 a tonne, down 6.5% from Tuesday's close.
While China has yet to loosen its restrictions on steel production, mills are not receiving support to increase inventories in the short term, and this could affect contract prices for the last month of the year, SinoSteel Futures added.
Dalian Commodity Exchange benchmark iron ore futures for January delivery fell 8.1% to 763 yuan ($ 118.07) a tonne as of 05.05 GMT, the largest percentage loss since July 30.
Steel prices on the Shanghai Futures Exchange were also undermined by falling commodity prices and weak economic data.
“We expect China's steel production cuts to target Q4 as demand slows seasonally and air pollution is in the spotlight (especially ahead of the February 22 Winter Olympics), and as a result, we expect prices to stabilize in September / October, and then continue to fall. below $ 100 a tonne again in 2022, ”UBS analysts wrote in a recent note.
In August, manufacturing activity in China declined for the first time in nearly 1.5 years as COVID-19 containment measures, supply bottlenecks and high raw material prices weighed on production volumes, hitting the economy.
