Luo Tiejun, vice president of the China Iron and Steel Association (CISA), has stated that iron ore sellers currently have control, resulting in iron ore prices remaining high.
He also called on the government to play a leading role in curbing the rapid rise trend of iron ore prices.
Following the Labor Day holiday (May 1-5), finished steel prices in China have risen sharply. Qu Xiuli, vice president of the CISA, said that high demand and the high cost of raw material, the easing of international monetary policy, environmental protection measures, and speculation in finance markets have all contributed to pushing up steel prices.
The demand from downstream industries, including the architecture, auto, machinery and home appliance segments, has been released quickly due to the good weather. At the same time, China’s strict control on capacity and output of crude steel increased market players’ expectations of reductions in steel output.
Moreover, China’s Ministry of Industry and Information Technology (MIIT) has issued its steel capacity replacement program, which will take effect as of June 1, with the aim of cutting overcapacity and reducing air pollution.
Furthermore, import iron ore prices have exceeded $200/mt CFR amid surging iron ore futures prices, reaching the highest historical levels. Accordingly, the CISA expressed the view that steel prices are unlikely to see obvious declines during the remainder of 2021 and will continue to fluctuate within a limited range at the current high levels.