According to Mining News Pro - The iron ore price plummeted on Tuesday as China ramped up a campaign to stop prices overheating even before the government rolls out demand-boosting stimulus measures this year.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $134.88 a tonne during morning trading, down 9.4% compared to Friday’s closing.
On China’s Dalian Commodity Exchange, prices dropped as much as 9.7% — very close to their
Several iron ore companies were reportedly called to a meeting with the economy’s top planning body in Beijing, while the official China Daily newspaper railed against what it called “guerrilla war” by speculators in China and outside.
“The government’s rhetoric on cracking down on iron ore prices is expected to drive trading for the near term as the market awaits more specific measures,” Wei Ying, an analyst with China Industrial Futures, said by phone.
The fresh regulatory attention highlights a difficult balancing act for Beijing, which wants to steady the economy – boosting steel consumption – without reprising last year’s damaging bout of commodity inflation.
“Beijing will focus more on growth and increased infrastructure spending in 2022,” BHP CEO Mike Henry said in a statement.
Headwinds for iron ore including steel-output curbs will relax this year, according to Henry, who spoke after the company posted record half-year earnings. Iron ore prices will remain extremely volatile long into the future, he said.
Iron ore had risen more than 60% from mid-November to smash through $150 a tonne last week, triggering initial actions by regulators including port checks, higher futures trading fees and a warning against disinformation.
China’s state planner will hold what it called a “reminding and warning” symposium with domestic and foreign iron ore traders on February 17 in an effort to ensure market stability, according to two sources and a notice reviewed by Reuters.
“History has taught us that these sharp plunges after Chinese rhetoric on investigating and supervising iron ore prices are short and temporary,” said Atilla Widnell, managing director at Navigate Commodities.
A fall in supplies from Australia and Brazil – together with rising steel production – have created a very finely balanced market, he said.
China to boost commodity price supervision in push for industrial growth
China’s state planner will take steps to stabilise the commodity market and hasten construction of new infrastructure, it said on Friday, in the effort to promote steady industrial growth.
In a joint notice, the National Development and Reform Commission (NDRC) and other regulators announced 18 measures in a notice involving fiscal, financial, environmental and more policies to prop up the industrial sector in the world’s second-largest economy.
The NDRC said the authorities would ensure supply and stabilise prices of primary products and key raw materials, including iron ore and fertiliser.
They also pledged to reinforce futures and spot market supervision of commodities and strengthen price monitoring.
China sought with a raft of measures recently to cool rapid growth in iron ore, a key steelmaking ingredient, to maintain market order and protect downstream users.
The most-traded iron ore futures on Dalian Commodity Exchange posted the biggest weekly decline in nearly two years.
The state planner said it will encourage companies to invest in certain domestic iron ore and copper projects and boost use of scrap metal.
Distributed solar power projects in central and eastern regions will also be encouraged, the NDRC said, adding that it would develop large-scale wind power and solar power bases in Gobi desert regions.
The economic planner said it would guide the financial system to transfer profits to the real economy this year, pushing state-owned banks to lend more to manufacturers and back major projects to cut carbon emissions.
The country will also speed up construction of new infrastructure projects, and increase financial support for traditional trading firms, cross-border e-commerce companies and others, authorities said in the notice.
Lithium prices rise on tight supply, strong China demand
Lithium prices continue on an upward trend amid a shortage of spot units, according to analysis from Fastmarkets.
Fastmarkets’ price assessment for lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price was 440,000-470,000 yuan ($69,408-74,140) per tonne on Thursday, compared to 400,000-430,000 yuan ($63,191-67,930) per tonne a week earlier.
“Chinese market participants were surprised that China’s lithium prices continued to rise rapidly after the recent Lunar New Year holidays, even though lithium producers in the country have resumed production this week,” Fastmarkets said.
“Even when those outputs are available, overall spot supply will still remain tight,” said the agency.
“Battery-grade lithium carbonate units are so scarce in the spot market that price is not the primary concern for downstream consumers. They are looking everywhere for available units. But there are few sellers who still have any spot supply,” a third Chinese lithium producer source told Fastmarkets.
Global EV sales jumped 83% year-on-year in 2021, insights from Adamas Intelligence show.
According to the market analyst, over 98% of all watt-hours deployed last year went into plug-in electric vehicles alone, both battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEV).
Adamas Intelligence’s report also points out that 2021 saw a record 286.2 GWh deployed onto roads in the batteries of new passenger EVs globally, a 113% leap over 2020.