Monday, May 16,
Spot iron ore prices in China remain unchanged on Monday. Indian exporters keep the quotes for Fe 63.5/63 at $187/MT and volumes remain thin.*
Tight supply from India
Supply of ore from India is likely to remain constrained as Goa port is shutting down on 20th May due to monsoons and the situation in Karnataka is still uncertain with the state delaying in issuing transport permits.
According to traders, “Indian spot iron ore is in short supply, and prices are unlikely to go down further. Traders in China are also not willing to reduce their offers for iron ore as they have already incurred high procurement costs”
Demand from steel sector likely to be suppressed
Steel mills in China do not seem to be much active in purchasing iron ore on account of its high prices and anticipated power cuts. Steel sector in China is already facing the supply glut and with the anticipated power shortage, demand from steel sector is likely to be suppressed going forward.
The People’s Bank of China on May 12 also announced to raise the cash reserve requirement ratio by 0.5 points. So, this might make steel mills to face greater capital pressure.
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