BHP Plans To Expand Iron Ore Production Aggressively

[China Iron Ore Brief] Iron ore concentrates prices in China pulled back notably this week. By region, prices in Tangshan, Qian'an, and Qianxi in Hebei dropped 10-15 yuan/mt; prices in Chaoyang, Beipiao, and Jianping in western Liaoning fell 5-10 yuan/mt; east China edged up 3-5 yuan/mt. Iron ore futures have been in the doldrums recently, suppressing local prices, and iron ore concentrates prices were generally in the doldrums this week. Looking ahead to next week, steel mill profits are expected to be under pressure, and steel mills are expected to have a strong desire to bargain down prices for iron ore concentrates.

This week, ferrous metals continued to pull back, with coking coal and coke seeing the most notable correction. In the first half of the week, the Ministry of Industry and Information Technology issued a notice on the implementation measures for capacity replacement in the steel industry, proposing that the capacity replacement ratio for ironmaking and steelmaking should be no less than 1.5:1. The further tightening of capacity replacement requirements had a longer-term impact. Meanwhile, macro markets outside China experienced significant fluctuations, and market expectations for ex-China "interest rate hikes" strengthened. In the second half of the week, data on the five major steel products were released, showing production increased somewhat while inventory continued to decline. Spot market side, traders began to show some flexibility on prices, the spot-futures price spread for hot-rolled coil continued to narrow, some spot-futures arbitrage traders mainly cut losses with shipments, and end-users continued to restock on an as-needed basis...

Iron ore futures weakened today, with the most-traded contract I2609 closing at 792 yuan/mt, down 0.13% from the previous trading session. Port spot prices were basically flat compared to the previous day.