Baosteel called for cooperation between the government, industry associations and related enterprises to calm speculation in the iron ore market, suggesting that iron ore prices should return to a more reasonable range.
As of noon on November 21, iron ore futures on the Dalian Commodity Exchange were up 978.5 yuan ($137/ton) per ton. On November 20, the most-traded January iron ore futures on the Dalian Commodity Exchange reportedly ended the day at 968 yuan ($134.24).
The upward movement in ore prices at the start of the week was driven by factors such as low raw material stocks, increased demand for stockpiling, higher margins for steel mills and concerns over potential supply disruptions.
Iron ore prices had maintained a 2-year high at the end of the previous week. The most-traded iron ore January futures contract on the Dalian Commodity Exchange rose 0.8% from the previous week to 963.5 yuan/ton ($132.96/ton) for the November 10-17 period.
On the Singapore Exchange, December futures prices for November 17 to 2023 rose 3% from the previous week to $130.96/tonne.
However, the market's recovery has been slowed by difficulties in China's real estate sector and corrective measures. China's National Development and Reform Commission (NDRC) stressed that iron ore prices were unreasonably high, prompting the Dalian Commodity Exchange to set a daily trading volume limit for iron ore futures on November 15. The limit restricts trading volumes to no more than 500 lots. Contracts are due for delivery in January-May 2024.