Iron ore prices climbed in Asian trading, supported by news of a temporary shutdown of several steel plants in China, the world’s largest steel producer and consumer, due to air pollution concerns.
Chinese consultancy Mysteel reported that some steel mills in the city of Tangshan have been ordered by authorities to halt production starting August 25 to ensure cleaner air ahead of the military parade scheduled for September 3 in the capital, Beijing.
Iron ore futures in Singapore rose 1.6% to around $103.50 per ton, following a weekly gain of 2.1%. Yuan-denominated contracts in the Dalian Commodity Exchange also advanced, alongside higher steel prices in Shanghai.
Analysts believe that production cuts bolster steel prices and improve mills’ profit margins, which in turn positively impacts demand for iron ore. They added that the government’s campaign against excess production has also supported prices and improved the sector’s performance in recent weeks, according to Reuters.
