Iron ore price up despite Chinese power curbs

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $119.31 a tonne, up 7.2% from Friday’s closing.

Benchmark iron ore futures on the Dalian Commodity Exchange, for January delivery, rose as much as 5.3% to 715 yuan ($110.57) per tonne in morning trade. They closed up 3.5% to 703 yuan a tonne.
Mongolia ordered some heavy industry, including an aluminum smelter, to curb use so that the province could meet its energy use target for the first quarter.

“Most bad news comes from China these days,” Ipek Ozkardeskaya, a senior analyst at Swissquote Group Holdings, wrote in a note.

Analysts with GF Futures, however, said the gains in steelmaking ingredient prices were a bounce-back from previous losses, but they are not sustainable, as demand at mills continued to ease.

Capacity utilisation rates of 247 blast furnaces at steel plants across China stood at 82.06% last week, down from 83.74% the week earlier, data from Mysteel consultancy showed.

“There is no relief on production cut pressure, as the government is asking more provinces around Beijing to cut their steel production to improve air quality ahead of the Winter Olympics next year,” ANZ senior commodity strategist Daniel Hynes said.

Construction used rebar rose 1.0% to 5,564 yuan ($861) a tonne. Hot-rolled coils, used in the manufacturing sector, inched 0.6% higher to 5,592 yuan ($866) per tonne at close.