Iron Ore Prices Firm up in International Market as China Embarks on Mega Dam in Tibet

(3 Minutes Read)

The steel-making ingredient jumped as much as 2.9% in Singapore to approach USD 104 a ton, following a run of four weekly gains, while futures for reinforcement bar in Shanghai also surged to the highest level since March. On the London Metal Exchange, copper advanced.

Iron ore surged 2.8% to USD 103.60 a ton at 10:45 a.m. in Singapore, while rebar and hot-rolled coil in Shanghai climbed more than 2%. Iron ore and steel climbed to a four-month high, as China’s plan for a mega dam in Tibet bolstered the outlook for demand.

The steel-making ingredient jumped as much as 2.9% in Singapore to approach US$104 a ton, following a run of four weekly gains, while futures for reinforcement bar in Shanghai also surged to the highest level since March. On the London Metal Exchange, copper advanced.

Premier Li Qiang launched construction of the 1.2 trillion yuan (USD 167 billion) hydropower project on the Yarlung Tsangpo River. The initiative — which will consist of five cascade dams — promises to deliver a positive economic jolt for construction materials, including metals, cement, and glass.

Iron ore is on course for the first monthly gain since January, as Beijing has continued a push to curb excess competition and overcapacity in the steel industry, fueling expectations it could have a positive impact on mill margins and lift raw-materials prices. The new dam project stands to benefit steelmakers, who have been grappling with a prolonged property crisis.

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The China Iron and Steel Association said it recently held a meeting with major steelmakers and the steel department chiefs at the industry ministry, at which participants vowed to step up efforts to curb so-called involution, a state of hyper-competition that hurts returns. China will also study setting up a new system to rein in overcapacity, the group said, without giving details.