COMMENT: Steelmaking raw materials lose shine as Chinese policy clouds demand

The recent drop in prices for steelmaking raw materials has brought the market’s focus back on China’s policy implementation – especially the rigour with which the country will crack down on pollution in the coming months.

Metal Bulletin’s cfr China Premium Hard Coking Coal Index has fallen 7.3% since September 4 to reach $199.87 per tonne on Thursday September 21.
Metal Bulletin’s 62% Fe Iron Ore Index has dropped 15% over the same period to $66.09 per tonne cfr China.
The drops experienced by the indices were driven by actual concluded transactions – and not assessments – at lower prices, which underline a palpable change in the outlook for the steelmaking raw materials markets.
Hebei jolt
The change in sentiment was augmented last week when the government of China’s Hebei province announced plans to cut coke and steel production in the winter months, in line with the directives previously announced by the central government.

As part of the cuts, cokeries in the province’s Tangshan city have been instructed to increase their coking time to 36-48 hours between October and March, a move...

Published

Deepali Sharma

September 22, 2017

10:08 GMT

Singapore