Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
The iron ore price fell again on Monday after China’s steel-producing province Yunnan asked local mills to adjust production schedules while ensuring that its 2021 crude steel output falls.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $123.84 a tonne, down 4.6% from Friday’s closing.
Part of the planned September crude steel production would be postponed to the last two months of the year, according to a government document.
The province, which makes about 2.3% of China’s total crude steel, has been missing energy consumption targets and suffering from power shortages. Yunnan also ordered its aluminum smelters to keep average monthly output for September-December at August volumes or lower and the cement industry to cut September production by more than 80% from August.
China has vowed to limit crude steel output this year at no higher than its 2020 production to curb industrial pollution.
Read more: Iron ore price hits one year low on China demand collapse
The most-traded January iron ore contract on the Dalian Commodity Exchange ended daytime trading 0.3% lower at 732.50 yuan ($113.66) a tonne. It touched 717.50 yuan a tonne on Thursday, the weakest since February 4.
Iron ore futures in Singapore are down about 45% from a peak set in May.
“Iron ore prices have had a volatile couple of months but as August closed, it was clear there had been a quantum shift in the market leading us to revise down our year–end forecast from $175/tonne to $125/tonne,” said Westpac senior economist Justin Smirk in a recent note.
(With files from Reuters and Bloomberg)
