Surging US steel helps iron ore price to 9-month high
Robust global steel production numbers released on Wednesday gave another boost to the price of iron ore, sending the steelmaking raw material to the highest price since early February this year.
Benchmark prices at the Chinese port of Qingdao of 62% Fe content ore jumped nearly 2% on Thursday to trade at $76.04 per dry metric tonne, according to data supplied by Fastmarkets MB. Steelmaking coal (premium hard-coking coal FOB Australia) added 2.7% to $225.09 a tonne Monday, the highest since March this year.
World crude steel output increased 4.4% year on year to just under 152m tonnes in September according to data released by the World Steel Association. Total global production for the first nine months of 2018 increased 4.7% compared to the same period last year to 1.35 billion tonnes.
Chinese steel output in September rose 7.5% from the year before to 80.8m tonnes; not far off the record 81.2m tonnes produced in July. The ramp up comes ahead of winter production cuts mandated by Chinese authorities. Beijing this year relegated decisions on pollution-fighting steelmaking limits to the provinces and overall the loss of production is not expected to be as severe as last year. For the first nine months Chinese furnaces pumped out 6.1% more steel.
US steel output in September was up 9% year-on-year as import tariffs continue to support domestic steel prices. Year to end-September output is up a more modest 4.1% on the back of diminished competition from imports encourage the restart of idled plants.
India is on course to overtake Japan as the world’s number two steel producer after growing output by more than 6% from January to September to 79.7m tonnes. The exception among the top producers, output from Japanese mills are flat this year.