Iron ore: price remains stable despite blockade of Chinese steel hub

The price of iron ore remained steady on Wednesday despite the Tangshan steel city’s decision to implement a temporary blockade. The Tangshan government implemented the blockade on Tuesday to avoid further cases of covid-19 as infections increased.

Although consumption of steel products is relatively sluggish, production is also down. The situation of tight stocks of raw materials has not yet been reversed, which may further support steel prices.

Steel products on the Dalian Commodity Exchange were on an uptrend after falling more than 3 percent during the overnight session, with the benchmark iron ore rising 0.4 percent to 823 yuan per tonne.

Due to transport disruptions, most steel mills are facing shortages of raw materials and there is also a possibility that production may come to a halt.