Iron ore and steel prices in China increase again

However, analysts warn that this price increase is not sustainable when the demand for steel in China is weak.

The price of iron ore for delivery in January 2022 on the DCE exchange within the past 6 months (Graphic: barchart)

Closing today's session on November 30 (Vietnam time), the  iron ore price  for January delivery on the Dalian Commodity Exchange (DCE) rose 2.4% to 610 yuan (95, 75 USD/ton). At the beginning of the session, there was a time when iron ore prices surged up to 6.4% to 633 yuan/ton.

Data from market research firm SteelHome (China) shows that the price of spot iron ore containing 62% iron content in China increased by 3 USD to 105 USD/ton in trading session on November 29.

The price of iron ore in China jumped sharply as many of the country's steel manufacturers increased their ore reserves. Meanwhile, analysts say that China's iron ore demand is still weak as investment in infrastructure development and real estate in the country decline, causing steel demand to stay at a low level. short.

Commodity derivatives trading firm Huatai Futures (China) said that the improved profits of steel producers have helped iron ore prices recover somewhat. However, Huatai Futures warned that the rise in iron ore prices is not sustainable as China's iron ore inventories are at a record high and steel production in the country continues to decline.

Closing today's session, the price of construction bar steel for delivery in May 2022 on the Shanghai Futures Exchange (SHFE) increased by 0.9% to 4,163 yuan/ton. The price of hot rolled coil for January delivery in January 2022 increased by 0.7% to 4,588 yuan/ton. In contrast, the price of stainless steel for delivery in January 2022 fell 1.7% to 16,905 yuan/ton.

The increase in iron ore price has had a spillover effect on the prices of some other input materials for steel production on DCE. Specifically, the price of coking coal delivered in May 2022 increased by 6% to 1,887 yuan/ton; Coke prices also increased 2.4% to 2,663 yuan/ton.

Industry and Trade