Iron ore loses steam amid crackdown on China’s steel mills

Iron ore prices for Australian fines imports to China have recovered to US$160.1 ($210) per dry metric tonne after falling to a six-week low earlier in the week.

The spot iron ore price had fallen to $US157.01 per tonne on Monday before recovering by $US4 per dry metric tonne the next day.

Fortescue’s share price has also suffered, dropping from $25.31 in late February to $19.27 at the time of writing.

BHP has faced a less severe drop from $50.87 on March 3 to $44.93 on Tuesday.

On March 14, the South China Morning Post reported that authorities in Tangshan, a city in Hebei, China, had cracked down on steel production when a heavy pollution alert was initiated amid goals to halve the country’s emissions.

No compliance leads to the risk of losing plant permits and production suspension, with owners potentially facing criminal sanctions.

While Fortescue’s present focus is on iron ore at present, company chairman Andrew Forrest has flagged the company’s position in the growing green power market.

The iron ore giant is aiming to become a major green hydrogen and electricity producer of global commercial scale, and believes this could eventually surpass its iron ore business.

“We are trialling and demonstrating green hydrogen technologies in global-scale commercial environments, while also rapidly evolving into a green hydrogen and electricity producer of similar scale,” Forrest said this month.

“Fortescue’s strong focus on green energy and our carbon neutrality targets will sit alongside our continuing excellence in, and commitment to, our iron ore business.

“While our green energy and industry initiatives may one day significantly outscale our iron ore business due to the global demand for renewable energy, our commitment to iron ore and resources globally remains indefeasible.”

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