中文
China's iron ore futures dived on June 21, after Chinese authorities carried out an investigation into spot iron ore prices, which have been continuously increasing and put great pressure on steelmaking profit.
The most-traded iron ore for September delivery on the Dalian Commodity Exchange tumbled 8.79% to close at 1,121 yuan/t on June 21, the same day when the National Development and Reform Commission and the State Administration for Market Regulation emphasized to ensure supply, stabilize prices, crack down on price hyping, hoarding and spreading malicious rumour, during their visit to Beijing Iron Ore Trading Center.
The most-active coke futures slumped more than 5%, while hot-rolled coil, rebar and coking coal declined by more than 4% on the same day.
Chinese central authorities have taken some measures on iron ore and other bulk commodity futures to curb speculation and stabilize prices in the recent two months.
Iron ore futures had encountered the first slump on May 13 since the Lunar New Year holiday, down by 7.49% to 1,173 yuan/t, after China's State Council vowed to curb the unreasonable surge of commodity prices and increase supply.
Besides, the production curbs imposed by Handan in Hebei province to combat the forecast pollution also dented the futures sentiment.
On June 19, Handan issued an announcement to restrain steel production over 18:00 on June 19 to 24:00 on June 30. Sintering production at mills in four counties were imposed additional 30% cut and all non-single blast furnace steel mills in the city need to halt one blast furnace, while single-furnace mills will be imposed another 10% cut to sintering production.
The increase of domestic iron ore supply also contributed to the futures plunge. The country mined 87.61 million tonnes of raw iron ore in May, rising 14.4% year on year. The volume brought the total production to 406 million tonnes during the first five months, 17.5% higher from the year-ago period, showed data from the National Bureau of Statistics.
However, some insiders reckoned resilient demand for the material would continue to support spot iron ore prices.
China churned out 380 million tonnes of pig iron during January-May, up 5.4% year on year. The increment of pig iron stood at 19.46 million tonnes, meaning an increment of 31.10 million tonnes in iron ore demand.
The global pig iron production excluding China's figure gained 10.58 million tonnes during the first four months, according to the World Steel Association, with iron ore demand increase at 16.93 million tonnes.
(Writing by Emma Yang Editing by Tammy Yang)
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