Iron ore mines in China will close down should prices drop toward $70 a metric ton, potentially creating a base for prices of the steel-making raw material, according to Australia & New Zealand Banking Group Ltd., Bloomberg reported.
“Substantial domestic iron ore mine closures would occur between $70 to $75 a ton, creating a floor,” the bank said a report dated today, citing findings from a recent visit to the world’s largest steelmaker. “Opportunistic Chinese steel mill restocking is not occurring at low prices and highlights how difficult near-term steel conditions must be on the ground.”
Slowing steel-demand growth in China, which buys about 67 percent of seaborne ore, and surging low-cost supplies from BHP Billiton Ltd. and Rio Tinto Group spurred a 44% drop in prices this year as a glut expanded.
On Wednesday, November 12, the US HRC futures contract 3-month price fell by 0.2%, landing at $631.00 per short ton and making it the day’s biggest mover. The spot price of the US HRC futures contract saw little change in its price on Wednesday at $632.00 per short ton.
Chinese steel prices were flat for the day. The price of iron ore 58% fines from India hit a high price of CNY 840.00 ($136.77) and a low price of CNY 830.00 ($135.14) per dry metric ton. The price of Chinese HRC remained essentially flat at CNY 2,970 ($483.57) per metric ton. For the fifth day in a row, the price of Chinese coking coal remained essentially flat at CNY 1,390 ($226.32) per metric ton.
The steel billet cash price saw little movement on the LME at $465.00 per metric ton. For the fifth consecutive day, the steel billet 3-month price held flat on the LME at $455.00 per metric ton.