Iron ore shoots up as the Chinese steel mills shut down production

Author: Paul Ploumis
23 Oct 2014 Last updated at 06:03:50 GMT
BEIJING (Scrap Monster): One of the traders based in Shanghai, stated that, the steel mills located in the Tangshan area of China, are restocking their store room, in advance, to the shutdown, which is planned to begin by the beginning of the month November.

Based on the reports, during the APEC meeting, the steel mills based on Hebri, one of the prominent steel producing province in China, were asked to either suspend the production or shut down the mills, to reduce the pollution in the air surrounding Beijing. According to the decision taken at the summit, the shutdown will most probably start by next month.

There is still a time period of two weeks from the shutdown, hence the producers are planning to increase their production by that time. According to The Steel Index, the price of iron ore per tonne has increased to 81.20 dollars from the beginning of this week.

From the five year low fall  of iron  ore to  77.50 dollars per tonne, in the month of September, China has improved a lot to reach 81 dollars per tonne, even in the midst abundant supply of low grade iron ore by low cost producers Rio Tinto and also BHP Billiton, expanding their production even in the weak state of iron ore, making it weaker.