Iron ore prices dropped further on Friday on weak sentiment amid Beijing’s crackdown on coal prices and lower steel output.
Production of five main steel products – rebar, hot-rolled coils, wire rod, cold rolled coils and medium plates – at steelmakers tracked by Mysteel consultancy rose 4.9% this week to 9.2 million tonnes. However, it was well below the 10.7 million tonnes weekly output in the year-earlier period.
“Affected by energy consumption controls, environmental curbs during winter heating season and the Winter Olympics… steel supply is expected to be restricted continuously, iron ore demand will be dented in the long term,” analysts with CITIC Securities said in a note.
The country’s top economic planner said initial results after its recent investigation into coal producers showed there was still room for further adjustment of coal prices.
($1 = 6.3911 Chinese yuan)
(With files from Bloomberg and Reuters)