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 slumped to its lowest level since 2022 and traded near $90 a ton as China’s main steel industry group advised mills to be cautious in boosting output too quickly to avoid snuffing out a post-summer recovery.
The steelmaking material has fallen by more than a third this year, with prices coming under severe pressure as flagging steel consumption batters loss-making Chinese mills. Steel buying typically picks up after the summer, which will provide a fresh test for producers.
“There will be a certain degree of recovery in steel demand through September and October, which is favorable for the steel market,” the China Iron & Steel Association said in a note, after meeting with steel producers in the south of the country. “However, we need to be cautious of the impulse to restart production,” the association said, “otherwise any improvement in the situation will end up a flash in a pan.”
China’s steelmakers are battling a crisis as the nation’s years-long property crunch wipes out a swathe of demand, creating fierce competition and a glut of the metal. This has created a “challenging environment for iron ore” in the near term, Goldman Sachs Group Inc. said in a note earlier this week.
Iron ore futures in Singapore fell as much as 2.4% to $90.35 a ton, the lowest since November 2022. They traded at $90.85 a ton by 3:25 p.m. local time, down about 10% this week.
The wider commodities complex is suffering amid concerns over China’s recovery and uncertainties over the US and global economy. Copper has retreated back below $9,000 a ton, while zinc — used mostly in the steel industry — was down more than 2% on Thursday.
“Global economic conditions remain broadly unfavorable for commodity demand,” National Australia Bank Ltd. analysts said in a note that cut its forecasts for base metals.
Inventories of iron ore at China’s ports are above 150 million tons, an unusually high level for this time of the year, after steel producers reined in output over July and August. Many analysts have said the ore’s prices should find support below $100 a ton — a level where high-cost miners can’t make money.
The fresh comments from CISA — adding to a string of warnings to the industry in recent weeks — were delivered at a gathering of steel producers from Guangdong and Guangxi in the south of the country. Those areas were hit particularly hard by low steel prices and margins, according to the group.
“Mills are losing money and iron ore inventories are piling up at ports every day,” Zhao Liang, head of research at GF Futures Co., said by phone. “The fundamental picture supports the slide in. Overall its due to weak steel demand — people are pessimistic.”
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