Spot iron ore prices in China remained at six-week lows amid a weak demand outlook for the steelmaking ingredient, with the country closing small steel mills as it races to meet its energy savings goals.
The prospect of tighter supplies in coming months has prompted Chinese steelmakers to raise prices, with industry leader Baoshan Iron & Steel announcing it will lift key product prices by up to 380 yuan ($56.22) per tonne for October bookings.
Shagang Group, China's biggest private steel mill,increased prices of reinforcing steel bar, or rebar, by 300 yuan per tonne and wire rod by 200 yuan per tonne, effective last Saturday.
China has either shut down or ordered several steel mills in the provinces of Guangxi, Guangdong, Jiangsu, Shandong and Hebei to trim output by up to 70 percent, a move some analysts had said could remove up to 25 million tonnes in annual capacity in coming months.
"We have seen a number of estimates suggest steel production will fall between 5-10 million tonnes in China as a result of the power cuts, reducing iron ore demand by 8-16 million tonnes over the next month or two."
Source: Reuters
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