Iron ore prices rose Tuesday (June 7), although traders fear the high prices are putting pressure on steel mills’ profit margins.
Iron ore futures for September exports were 0.6% lower at 928.50 yuan per ton ($139.32) on China’s Dalian Commodity Exchange.
Leading Chinese steel producers have expanded their production capacities following the relaxation of COVID-19 control measures. Including a decrease in imported iron ore stocks at Chinese ports.
Sinosteel Futures analysts said in a note, “Short-term demand for iron ore is growing more than expected. But the profits of the downstream steel mills are weak.”
China’s crude steel production fell in 2021 for the first time in 6 years after hitting a record high in 2020 as China ramps up efforts to curb greenhouse gas emissions in the steelmaking sector.