Meanwhile, Benchmark Dalian iron ore fell 3% to its lowest level in nearly two weeks as the outlook for Chinese demand darkened.
The Chinese government, seeking to curb steel production to ensure clean air, has asked mills in more cities in northern China to cut output from Nov. 15 to March 15.
China’s steel output reduction target in the first quarter of 2022, when the Olympic Winter Games are scheduled to take place in Beijing and the neighbouring Hebei province, was “more aggressive than market expectation”, Citi analysts said.
“If we assume the rest of the country keeps steel production flat, national steel output in 1Q22e should decline by 12% YoY, following 5% YoY growth in 8M21 and 9% YoY decline over September to December 2021,” the analysts said in a note.
(With files from Reuters and Bloomberg)
