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The figure for 2022 has been revised downward from $109 per tonne, as stated in a previous report published in June.

“Falling domestic demand for steel in China due to slower construction activity and the implementation of a number of government policies has resulted in weaker iron ore prices,” the government said in its report.

“Key government policies in China are also having a significant impact on steel demand so far in the September 2021 quarter,”

Iron ore price and monthly China steel production
A major driver of China’s boom in demand for steel in the first half of 2021 was the considerable levels of fiscal accommodation provided by the government in response to the covid-19 pandemic. This included growth in total infrastructure investment of 30% year-on-year (3-month average) at the end of March.

However, according to the report, this stimulative spending now appears to be fading, with total infrastructure investment contracting in June for the first time in over 12 months.

Prices of iron ore and other commodities like aluminum rose on Monday.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $117.12 a tonne, up 1.7% from Friday’s closing.