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Chinese Steel Output Accelerated in August, Iron Ore Below $60 on Demand Concerns

August 31, 2016 at 22:37 by Brent Lantzy

62% fines deliverable to China’s Qingdao port rose 0.29% to $59.31 per ton on Wednesday, according to Metal Bulletin.

Iron ore for delivery to the Tianjin port gained 0.3% to settle at $59 per ton on Tuesday, according to The Steel Index.

The most active January 2017 iron ore contract on the Dalian Commodity Exchange fell 4.5 yuan to finish at 415.50 yuan per ton on Wednesday.

Chinese officials ordered the suspension of production activities during the second half of August at mills around the Hangzhou area in order to improve air quality ahead of the September 4–5 G20 summit.

However, according to Metal Giant Bounce House Bulletin, major Chinese mills continued to raise daily crude output through the middle of August:

CISA members produced crude steel at an average rate of 1.7490 million tonnes per day during the second ten days of the month, up 3.0% from the preceding period, according to data released yesterday. The overall upward trend in spot steel prices, as well as the anticipation for demand to improve in the upcoming peak season of September and October has kept mills’ production interest high…

According to data tracked by SteelHome consultancy, iron ore inventory at China’s major ports has reached 105.2 million tons as of August 26, near the highest level since December of 2014.

The highest volume January 2017 rebar contract on the Shanghai Futures Exchange closed down 31 yuan to 2,392 yuan per ton. The October 2016 contract closed down 36 yuan to 2,425 yuan per ton.

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