Sierra Leone woos miners to clean energy with $11 billion plan
Most mining firms rely on their own diesel supplies to extract iron ore, diamonds, rutile and bauxite in the resource-rich country.
Iron ore prices rose on Monday, amid support from increasing billet prices in China over the weekend and a potential easing of restrictions on steelmaking in Tangshan.
Benchmark 62% Fe fines imported into Northern China (CFR Qingdao) were up 4.25%, changing hands for $198.83 a tonne, according to Fastmarkets MB.
Benchmark iron ore on the Dalian Commodity Exchange for September delivery surged 45.3% to 1,106 yuan per tonne.
Chinese rebar and hot-rolled coil futures also jumped after the market recorded heavy losses over the past few weeks following the government’s vow to stabilise commodity prices.
Last month, officials in Tangshan warned its steel mills to maintain market order and safeguard companies’ normal operations.
The local government there said it would look into illegal behaviour including market manipulation and hoarding, and would punish and suspend businesses found guilty.
Iron ore prices could drop back to around $140 per tonne by end-2021, and $120 per tonne by end-2022 as the market shifts into a surplus, according to Capital Economics’ latest report.
“While China’s announcement that it will crackdown on speculation and market irregularities has taken some of the froth out of the iron ore market in recent weeks, we think the price of iron ore will ultimately be driven even lower by less favourable fundamentals over the rest of the year”, the research consultancy says.
The latest reading of official Chinese purchasing managers’ indexes (PMIs) for May shows that despite activity nudging up from 53.8 to 54.2, supply shortages are pushing up prices even as final demand for manufactured goods appears to be levelling off, according to a research note by London-based Capital Economics.
“There continue to be signs of supply shortages in the survey breakdown, with delivery times lengthening further while firms had to dig deeper into their inventories for raw materials,” says the consultancy in a research note.
“This is stoking price pressures – the price indices reached a record high this month, which point to a large month-on-month rise in producer prices.”
($1 = 6.3636 Chinese yuan renminbi)
(With files from Reuters)
