FOCUS: China’s iron ore procurement this winter will expose structural-cyclical nature of raw material demand

The iron ore market will be watching the rollout of China’s policies and Chinese buyers’ procurement strategies in the winter months to see what lies ahead for the steelmaking raw material, which has faced substantial price volatility this year.

The winter heating season in China has become a crucial period for iron ore buyers and suppliers, with environmental protection a key aspect of China’s 13th five-year plan 2016-2020. It is the period from October to March when the air is prone to becoming heavier due to polluting industries, such as steelmaking.   But blue Beijing skies have been a common sight during this period since 2016, clearly showing that China has walked the walk on environmental protection. Miner BHP recently described China’s environmental controls among the most demanding in the world. Price volatility There is much anticipation regarding Beijing’s environmental protection policies this winter and how they might affect iron ore grade differentials and outright prices. The anticipation stems from a volatile year for the iron ore market so far in 2019. Fastmarkets’ index for 62% Fe iron ore fines, cfr Qingdao, stood at $87.81 per tonne on Friday August 23, rising $3.39 per tonne...

Published

Deepali Sharma

August 29, 2019

11:46 GMT

Singapore