Snippet from the FT
The price of iron ore, a key steelmaking ingredient, dropped below $60 a tonne for the first time since 2009 as China vowed to cut overcapacity in the steel industry and close mills that violate pollution standards.
Benchmark Australian iron ore for delivery to China fell $2.80, or 4.5 per cent, to $59.30 a tonne on Thursday, according to The Steel Index, a price reporting agency. Iron ore futures on China’s Dalian exchange fell 3.1 per cent to a three-month low.
Iron ore is a key profit generator for several large mining companies, including Rio Tinto, BHP Billiton, and Vale of Brazil.
China’s Premier Li Keqiang said downward pressure on the economy was building and the government would cut overcapacity and tackle pollution in his opening speech to the National People’s Congress in Beijing on Thursday. He also set the country’s economic growth target at around 7 per cent, the lowest target since 1999.
China’s official steel industry association said this year that up to 70 per cent of the industry could not meet the country’s environmental standards. <snip>
