A Chinese flower show has been blamed for spike in the price of iron ore

The price of iron ore rocketed 20% on Monday to $62.60 per tonne

Tangshan, located 124 miles east of Beijing, accounts for about a 10th of China’s steel production thanks to its rich coal and iron deposits (Getty Images)

A flower show in the industrial city of Tangshan, China, has an unlikely connection to the a spike in the price of iron ore, according to reports.

The price of iron ore, a key steel-making ingredient, surged almost 20 per cent on Monday.

In an effort to reduce pollution steel mills in Tangshan were told to shut down from April until October 2016 during the World Horticultural Exposition when the city is expecting 10 million visitors.

Local authorities increased production at the mills temporarily over the weekend in the anticipation of the shutdown. Buyers raced to get their hands on the commodity ahead of the mill closing, pushing up prices, the Financial Times reported.

The price of iron ore rocketed 20 per cent on Monday to $62.60 per tonne. It has risen 46 per cent so far this year and is up 70 per cent from a record low in December.

Jiao Yanlong, Tangshan’s Communist party secretary, told the FT that temporary air quality control measures would see production at the city’s steel mills cut in half until the end of September.

The exhibition “shows that Tangshan has grasped the concept of green development”, Mr Jiao said.

The horticultural expo, which coincides with the 40th anniversary of Tangshan’s catastrophic earthquake, is an attempt to change the image of the city. The Tangshan earthquake is believed to be the largest of the 20th century by death toll.

Chinese Premier Li Keqiang's announcement to invest in infrastructure, including ¥ 800 billion ($123 billion) for a railway construction and ¥1.65 trillion ($2.5 billion) to build roads, may have also contributed to the rise in ore price, according to another report by commodities data firm Platts.

Tangshan, located 124 miles east of Beijing, accounts for about a 10th of China’s steel production thanks to its rich coal and iron deposits, the FT said. It has now found itself at the heart of a major crisis gripping the Chinese steel industry as capacity far outstrips demand.

Apparent steel consumption in China, the world's biggest producer and consumer, fell 5.7 per cent to 590.47 million tonnes in the first 10 months of the year, the China Iron and Steel Association (CISA) said.

“China will face more and tougher problems and challenges in its development this year, so we must be fully prepared to fight a difficult battle. Downward pressure on the economy is growing. Domestically, problems and risks that have been building up over the years are becoming more evident,” Li Keqiang said.