China’s steel mills are cutting production as they struggle with rising costs and weak demand, compounding challenges for iron ore demand.
Chinese steel mills are cutting production due to a global glut and a worsening property crisis, squeezing iron ore prices already weakened by stockpiling of the metal over the past months.
Industry data published in China said 11 major steel mills this week lowered their prices, while seven left prices unchanged, according to the China Steel Network Information Research Institute., an analyst at China Steel Network, said.“The total number of new projects this year has decreased, funds are still tight, and the driver of profit recovery from price decline in the medium term is still there.
“There’s probably a speculative element at work today, with investors looking at what it will take for China to hit its growth targets for the year, and deciding that it’s just not going to happen.”China’s annual meeting of its rubber stamp parliament called theconcluded on Monday without delivering any meaningful solutions to the country’s property crisis, which has dragged down construction activity.
“For real estate companies that are seriously insolvent and have lost the ability to operate, those that must go bankrupt should go bankrupt, or be restructured, in accordance with the law and market principles,” he said.Still, Australian miners said they remained confident in China’s long-term demand for iron ore.
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