Iron ore has topped $150 a tonne as China offered its massive steel industry five extra years to boost its carbon footprint.
Steel production accounts for about 15% of China's carbon emissions. On Monday, the government set 2030 as the new peak emission deadline for the sector, down from the earlier target of 2025.
"This is a big schedule adjustment that gives the steel sector more room to achieve peak emissions in an orderly manner," said Xu Xiangchun, an analyst at research firm Mysteel.
"Hurrying to meet carbon targets could lead to 'unsustainable economic costs'," he said.
According to Fastmarkets MB, the benchmark 62 percent ore imported into North China changed hands at $149.64 a ton during morning trading, the highest since August 31st. The metal has rebounded more than 70% from its November plunge on expectations of a more robust rise in 2022.
Singapore iron ore futures rose 3.8% to $153/t, the highest level since August 31, and traded at $148.20 by 4:20 pm local time Tuesday.
President Xi Jinping said last month that climate targets must not jeopardize the supply of goods that "ensure the normal life of the masses."
According to Li Shuo, analyst at Greenpeace East Asia, the policy change could jeopardize China's overall goal of peaking emissions by 2030.
"Traditional industries such as steel will need to peak much earlier to make room for industries such as transportation, which are still growing."