Iron Ore Drops as Simandou Starts Shipments
Iron ore futures fell to around CNY 770 per ton after the Simandou project in Guinea sent its first shipment to China, boosting global supply. The shipment offers an alternative to Australian and Brazilian iron ore. Prices also dropped after the China Iron and Steel Association discussed expanding domestic production. Additionally, China announced measures to support its property sector, including lower taxes and mortgage subsidies.
Iron ore futures fell toward CNY 770 per ton in early December, pulling back sharply from one-month highs after the massive Simandou iron ore project in Guinea sent its first commercial shipment to China, marking a significant boost to global supply.
The delivery is expected to arrive in China by mid-January and provides the world’s top iron ore consumer with an alternative to dominant shipments from Australia and Brazil.
Prices also faced pressure after the China Iron and Steel Association met with major domestic miners and regulators to discuss plans to expand the country’s iron ore production.
Topics included land approval, mining rights renewal and ecological compliance costs.
Meanwhile, the Chinese government announced new measures to support its debt laden property sector, including lower taxes on home buying and additional mortgage subsidies, aiming to counter prolonged headwinds in a sector that is a key source of ferrous metal demand.
