The world’s big three iron ore miners appear to be entering the final phase of a fight to increase market share in China as massive expansions drive more high-cost rivals out of business, Reuters UK reported.
The global giants have met stubborn resistance after many big Chinese miners kept producing despite weaker iron ore prices, helping push prices far lower than Rio Tinto, BHP Billiton and Vale SA envisaged when they began to flood the world with ore two years ago.
Cracks are starting to appear in China’s resilient state-mining sector, where mines can have production costs 20-50% above the market but also employ thousands of workers and are aligned with big steel makers.
One mine in Beijing that produces about 2 million metric tons of iron ore concentrate a year plans to suspend production for one-and-a-half months.
Chinese steel closed mixed yesterday. The price of iron ore 58% fines from India hit a high price of CNY 450.00 ($72.14) and a low price of CNY 445.00 ($71.33) per dry metric ton. The price of Chinese slab finished the day at CNY 2,460 ($394.34) per metric ton following a 1.2% increase. The price of Chinese HRC showed little movement on Wednesday at CNY 2,510 ($402.35) per metric ton.
The steel billet cash price was unchanged on the LME at $500.00 per metric ton. The 3-month price of steel billet continues hovering around $480.00 per metric ton on the LME for the fifth day in a row.
The 3-month price of the US HRC futures contract reached a 30-day low after decreasing 0.9% to $540.00 per short ton. After falling 0.2% to $537.00 per short ton, the US HRC futures contract spot price reached a 30-day low.