China's iron ore imports rose to 60.57 million tonnes in
September, it's highest since January's record high, on restocking from steel
mills.
The shipments were the result of steel mills stocking
up on raw material ahead of the peak consumption season over September and
October. However, the jump in imports seems to have added pressure to
the slack spot iron ore market, traders said.
Contrary to market expectations, spot iron ore prices turned
to fall in September, with prices down more than $10 over the month. The price slide has continued into
October, with prices approaching a 2011 low.
The price of iron ore on the domestic market has dropped
since the middle of September and is expected to continue to do so over the
next few weeks.
Offers for Fe 63.5/63 remain at
$164-165/MT as buying interest is extremely low and traders expect production
cuts in November.
The price slump is primarily attributable to two factors.
The first is the slowdown in the real estate and machinery sectors. The second
is the expansion in production of global iron ore producers, with supply predicted
to surpass demand by 2014.
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