c china iron ore RTR2BXBD Sheng Li

Chinese ports have hoarded enough iron ore to produce over 100 million cars

100 million

In its mission to reduce air pollution, the Chinese government has been imposing production limits on the mills that turn iron ore into steel. As a result, mountains of iron ore are forming in Chinese ports.

Published   |  Photo by Reuters/Sheng Li
c china iron ore RTR2BXBD Sheng Li
100 million

Chinese iron ore supply has peaked at 162 million tons this year, enough to produce more than 100 million cars, up from about 114 million tons early last year.

c china iron ore RTR2BXBD Sheng Li
100 million

Because using high-quality iron ore results in a less polluting steel-making process, Chinese steel mills are likely taking high-quality ore from the ports and leaving behind low-quality ore.

c china iron ore RTR2BXBD Sheng Li
100 million

That’s resulting in a widening distance in prices of different grades. High-quality ore is costing 70% more than low-quality ore, up from a gap of just 20% two years ago.

c china iron ore RTR2BXBD Sheng Li
100 million

That could benefit major firms like Brazil’s Vale and Australia’s Rio Tinto, which can easily meet that higher level of quality, but put pressure on smaller companies selling lower quality minerals to China.

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