The opposing forces taking hold of prices in the iron ore and coking coal markets could spill over in the first quarter of 2022 due to their differing fundamentals and Chinese policy, according to market sources.
Depressed iron ore vs bullish coking coal
Iron ore prices have been falling since early July due to
cues from the Chinese government that crude steel production in 2021 should not exceed that of 2020, a move that depressed demand for the steelmaking raw material.
Fastmarkets' index for
iron ore 62% Fe fines, cfr Qingdao stood at $112.06 per tonne on Tuesday September 28, down by 48.9% from July 1's $219.32 per tonne.
Fastmarkets' index for
iron ore 65% Fe Brazil-origin fines, cfr Qingdao stood at $136.50 per tonne on September 28, down by 45.9% from $252.40 per tonne on July 1.
Meanwhile, coking coal prices have been trending upward since October 2020, when the Chinese government
imposed a ban on Australian materials.
Increases since July have been more pronounced. Fastmarkets' index for premium hard coking coal, cfr Jingtang was at $597.06 per...