Iron ore prices gained for a second day on Wednesday – recovering from a sharp drop over the weekend following comments by China’s steel industry body characterizing the current pricing environment as “unreasonable.”
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China (CFR Qingdao) were changing hands for $156.45 a tonne on Wednesday, up nearly 1% from Tuesday’s peg.
Last week the steelmaking raw material hit $160, the highest since February 2013 and up 70% year to date.
On the Dalian Commodities Exchange, futures prices hit a new all-time high on Wednesday, closing above 1,000 yuan for the first time since the launch of the contract in 2013.
Reuters reports the China Iron & Steel Association (CISA) recently called on regulators to investigate trading in Dalian, saying there were signs speculators are behind the price spikes. China forges more steel than the rest of the world combined.
In a video call with No. 2 iron ore producer Rio Tinto on Tuesday, CISA vice-chairman Luo Tiejun described the current pricing mechanism as “unreasonable” and “not conducive to the long-term healthy development of upstream and downstream,” according to a statement from the association.
Rio said on Wednesday it is always working with customers, suppliers and industry stakeholders “to ensure major markets, including iron ore, are open, liquid and transparent.”
To this end, Rio Tinto has expanded iron ore sales to China via WeChat and blockchain, some of which were settled in yuan, the spokesman added in an email to Reuters.
(With files from Reuters)