FX.co ★ Iron Ore Drops as Simandou Starts Shipments

In early December, iron ore futures declined to approximately CNY 770 per ton, retreating sharply from recent monthly peaks. This drop followed the first commercial shipment from the substantial Simandou iron ore project in Guinea to China, contributing significantly to the global iron ore supply. This shipment, scheduled to arrive in China by mid-January, offers the world's largest iron ore consumer an alternative source to the prevailing shipments from Australia and Brazil. Additionally, iron ore prices experienced downward pressure after discussions held by the China Iron and Steel Association with prominent domestic miners and regulators regarding plans to bolster the nation's iron ore production. Key topics of these discussions encompassed land approval, the renewal of mining rights, and ecological compliance costs. Concurrently, the Chinese government revealed new strategies to bolster its debt-burdened property sector, including reduced taxes on home purchases and increased mortgage subsidies, targeting the mitigation of persistent challenges in a crucial sector for ferrous metal demand.