Iron ore futures dip amid intense emission curbs in China

October 05, 2021 01:15 PM AEDT | By Arpit Verma

Iron ore futures dip amid intense emission curbs in China — Image source: Copyright © 2021 Kalkine Media

Iron ore’s bearish drive

The prices plummeted to record low levels on the back of an ongoing power crunch in the world's biggest consumer of iron ore – China. The country's steel industries along with other factories and material manufacturers are under pressure from authorities to keep lower outputs amid tight electricity supplies. The industries and factories are facing forces shutdowns, amid an intense shortage of energy in the country.

More than four-fifths of the country's steel mills have suspended their operations in September for maintenance. China is strictly trying to limit its carbon emission, as a part of the country's long-term goal to attain carbon neutrality by 2060. The country's environmental agenda along with underinvestment in the country's fossil fuel production sector amid pandemic-related uncertainty has left both factories and households without electricity. Iron ore prices slumped as much as 8.33% in the last one year.

Iron ore to hit US$150 per tonne by late 2021

Iron ore prices in late 2021 | Source: © Triderrodolphe | Megapixl.com

Meanwhile, Australia, one of the largest iron ore exporters to China believes that the prices of base metal will hit US$150 per tonne by late 2021, as per a report published by the country’s department of industry, science, energy & resources.

Tumbling demand for steel in the country’s construction sector has also weighted the prices of iron ore.

Bottom Line

Iron ore prices plummeted to record low levels on the back of China's move to limit its carbon emission, as a part of the country's long-term goal to attain carbon neutrality.

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