The price of iron ore fell to its lowest level since November 2020, after falling demand prospects for steel products and raw materials in China.
Iron ore with an iron content of 63.5% for delivery to Tianjin, China was around $ 85 per tonne, close to the lowest since November 2020.
“The price of iron ore has yet to bottom out,” analysts from Zhongzhou Futures Co Ltd wrote in a weekly note, citing production cuts in China, due to its decarbonization efforts and the crisis. of its real estate sector.
A planned fall
China’s monthly steel production has been steadily declining since July, as tight controls on the production and use of electricity by Chinese state planners have reduced both supply and demand for metal.
China has also restricted the consumption of electricity in energy-intensive sectors, especially the steel industry, to ensure a stable supply before winter.
Steel mill operations in China are expected to remain restricted ahead of and during the Beijing Olympics in February, to help remove smog that has plagued urban centers such as Beijing.
The country’s crude steel production from January to October totaled 877.05 million tonnes, down 0.7% on an annual basis. This led the leading iron producer Vale to move away from China and invest in Latin steel mills to diversify its sales of iron ore and pellets.
These declines are expected to continue. Market analyst Fitch Solutions predicts prices will drop to $ 65 per tonne by 2025 and $ 52 per tonne by 2030: “We maintain our view that iron ore prices will constantly tend downward, as the slowing growth in Chinese steel production and increasing production by world producers will continue to weaken the market. ”