Iron ore price retreats amid Chinese intervention to cool commodity prices

Iron ore prices fell on Wednesday amid Chinese intervention to cool commodity prices, while demand for steel stayed subdued on output controls.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $119.86 a tonne, down 2.4% from Tuesday’s closing.

Benchmark iron ore futures on the Dalian bourse, for January delivery, closed up 1% to 707 yuan a tonne, recovering from 4.1% drop earlier in the session.

Related: China’s steel group says must ensure supply, control price in volatile market

“Affected by energy consumption controls, environmental curbs during winter heating season and the Winter Olympics… steel supply is expected to be restricted continuously, iron ore demand will be dented in the long term,” analysts with CITIC Securities said in a note.

China’s cabinet issued an action plan to bring carbon emissions to a peak before 2030, urging industry to continue to cut steel capacity, improve recycling rates of steel scrap, and promote electric arc furnaces technologies.

The country’s industrial profits rose at a faster pace in September on strong profits at mining and raw material manufacturing sectors, though high commodity prices and supply-chain problems still weigh on companies’ profitability, according to the National Bureau of Statistics.

(With files from Reuters)