The most-traded September iron ore contract on China’s Dalian Commodity Exchange was 0.8% higher at 1,182.50 yuan ($182.41) a tonne by 0700 GMT, after earlier falling by up to 2.6%.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $217.98 a tonne on Friday, down 0.6% from Thursday’s closing.

“China will have to cut (steel) output by more than 50 million tonnes in the final six months of this year to meet its carbon emissions targets,” said John Meyer, an analyst at London-based corporate finance firm SP Angel.

China’s crude steel output hit a monthly record high of 99.5 million tonnes in May, bringing its January-May output to 466.3 million tonnes, up 13% from a year ago — despite its goal of a lower output this year than in 2020.

“The risk for the Chinese government is that steel prices will continue to surge higher if supply is constrained, threatening the government’s broader effort to contain commodity price inflation,” Meyer said in a note.