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.
Benchmark Dalian iron ore prices posted their deepest weekly fall in more than two months despite a slight rebound late on Friday hurt by intensified restrictions on Chinese steel production aimed at curbing air pollution.
A faltering global economy exacerbated concerns about demand for steel products and raw materials, while higher quarterly output reported this week by some of the world’s biggest iron ore miners added fuel to the sell-off in futures markets.
China’s third-quarter economic growth slowed to its weakest pace in almost three decades as the bruising US trade war hit factory production, boosting the case for Beijing to roll out fresh support.
Dalian Commodity Exchange’s most-traded iron ore contract , with January 2020 expiry, closed up 0.7% at 616 yuan ($86.99) per tonne, after touching a seven-month low.
The central province of Henan has issued an orange smog alert, the second highest in China’s three-tier pollution alarm system, which will be applied to 12 cities.
The alert means pollution controls in heavy industries, including steel and coke, will be strengthened from Oct. 18 to Oct. 23.
In Tangshan, China’s top steelmaking city, where tighter production curbs have already been imposed, anti-smog emergency measures will reportedly be strengthened due to authorities’ warnings about air quality.
Dalian iron ore fell nearly 7% from last week, and the weakness may persist.
“The downtrend may continue in the next few months,” a Shanghai-based trader said, citing Tangshan’s “very strict” steel production restrictions, and slowing global demand for steel and iron ore.
“Steelmakers in Europe and in Japan seem to be also under pressure and are cutting production,” the trader said. “Global demand for steel is not very good, while iron ore supply particularly in China is more than enough.”
On the Singapore Exchange, the front-month November iron ore contract was down 0.3% at $82.53 a tonne at around 0700 GMT.
Benchmark spot 62% iron ore cargoes fell to a seven-week low of $86.50 a tonne on Thursday, from Wednesday’s $89.50, SteelHome consultancy data showed.
From Oct. 18 to Oct. 22, “tougher operations restraints will be placed on (Tangshan’s) industries regarded as heavy emitters of pollution”, said industry website Mysteel Global, citing an Oct. 17 city government notice.
China’s monthly crude steel output slid to a six-month low in September as mill operations were hit by restrictions.
Growth in China’s industrial output and fixed-asset investment could be relatively stable in October from pent-up demand following the anti-pollution campaign ahead of the Oct. 1 National Day, analysts at Nomura said in a note.
“However, we believe the stability will be short-lived and expect the growth slowdown to worsen in coming quarters, given strong growth headwinds and still-elevated U.S.-China trade tensions,” the analysts said.
The most-traded construction steel rebar on the Shanghai Futures Exchange ended up 0.2%, while hot-rolled steel coil gained 0.1%, taking a breather after hitting multi-month lows.
Coking coal rose 0.9% while coke slipped 0.2%. Stainless steel slumped 1.7%.
($1 = 7.0814 yuan)
(By Enrico dela Cruz; Editing by Rashmi Aich and Jason Neely)
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