Hunan Gold shares surge after large deposit found in China
The Geological Bureau of Hunan Province said on Thursday that it had detected more than 40 gold veins containing an estimated 300 tons of the precious metal.
Iron ore prices retreated Tuesday as the market weighed a coming seasonal pick-up in Chinese demand against the prospect of a broadly weakening economy and more curbs on steel output.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $153.67 a tonne, down 1.9% from Monday’s closing. In China, iron ore closed 3.2% lower, while steel futures also retreated.
The raw material had been regaining some ground after a collapse in July, with China’s upcoming fall construction season suggesting higher demand.
China’s economic activity weakened more than expected in August as an outbreak of the delta virus variant curbed consumer spending and travel.
Iron ore also faces headwinds as China wants to rein in output, and production curbs to reduce emissions are expected to intensify in Q4.
Related read: Global iron ore production to accelerate until 2025 – report
Even if seasonal demand is expected to emerge soon, “it’s hard to change the weak outlook for the medium- and long-term given the overall guidance to lower crude steel production,” Zhongzhou Futures wrote.
Earlier this week, Baoshan Iron & Steel Co., the listed unit of China’s biggest producer, flagged the potential for renewed price declines in iron ore.
“We expect China’s steel curtailments to be targeted in 4Q when demand slows seasonally and air pollution is in focus (especially ahead of the Winter Olympics in Feb-22) and as a result we expect prices to stabilise in Sept/Oct before continuing to fall back below $100/tonne in 2022,” UBS analysts wrote in a recent note.
(With files from Bloomberg)
