SPECIAL FOCUS
China's Slow Return to Recovery Due to a new COVID-19 epidemic, Chinese manufacturing activity has been on the decline in the first half of 2022. However, the market has exhibited indications of revival since mid-May, particularly in Shanghai, the country's economic capital. Steel demand, however, is expected to stay low until manufacturing production returns to normal in June, according to experts. China's manufacturing production index for steel consumption declined by 28 points from 2021 and 16 points in 2020, according to S&P Global Commodity Insights. These aren't exactly encouraging data, and despite the stimulus package, economists are concerned about the pace of recovery.
China Recovers Iron Ore on the High China's industrial industry has been hit hard by the country's restrictions and lockdowns this year. Chinese steel mills are increasing production now that the country is beginning to open up its economy. Iron ore prices are rising, but some analysts say it's merely a dead cat bounce.
Despite the first signs of a prospective manufacturing revival,
China's steel sector is still on the verge of collapse. Last Monday, though, benchmark iron ore prices in the country rose by a surprise 7%. This is the highest daily gain in over two months. Is this an indication that we should be more optimistic, or is it just a dead cat bounce! 26 | SKILLINGS MINING REVIEW July 2022
India Tariffs are being Fought Hard The 7% increase in iron ore futures indicated earlier is perplexing. To begin with, it follows India's decision to raise export tariffs on several commodities to reduce inflationary pressures. The country raised tariffs on iron ore and steel intermediates in particular. This includes increasing the taxes on new iron ores and concentrates from 30% to 50%. Pellet tariffs, on the other hand, increased from zero to 45 percent. Tariffs on coking coal and coke were eliminated entirely, according to research. The most actively traded iron ore futures on the Dalian Commodity Exchange (for September delivery) were up 4.4 percent in the first week of June, trading at $129.18 (864 yuan) per tonne. This came after a 6.9% increase, which was the largest since May 6. According to some experts, India's decision may not have as great of an impact on China's iron
