Global iron ore prices for Fe 62% fines are assessed at USD 37.5/MT, CFR China on 14 Dec’15. Last week, prices touched to USD 37/MT, CFR China.
However, the gain is somewhat small but after a long time we can observe the figures in red turning in green. Meanwhile, this gain could not continue for a long period as few other major factors are forcing prices to drop down further.
Shanghai rebar, a most active steel product produced by China touched an all time low and a way long to get stable. Now, prices for Shanghai rebar are recorded at USD 260/MT.
In recent updates, Australia, the largest iron ore exporter to China, is also expecting no rebounding of iron ore prices in near term. According to Australian government, the average iron ore prices will touch at around USD 39/MT till next June. On 14 Dec’15, Fe 62% iron ore fines prices closed at around USD 37.5 /MT, CFR China.
The underlying demand in China is still continuous and there is no significant change seen. In addition, winter is also curbing construction activity in China, further hitting steel consumption that has been continues to shrink since starting this year.
More and more steel mills are about to face closure by the end of this year as producers facing widen losses and cannot respond to weak demand.
The global glut has already hit iron ore prices. Offers will continue to fall as the largest companies namely Vale, Rio Tinto and BHP Billiton have expanded their production and grabbed market share.
Australia’s Roy Hill mine already started shipping ore to its major customers last week. The project will pump 55 MnT of ore annually.
Alongside, Brazil’s Vale intends to increase production by 30%. As we all know, Vale’s S11D project is expected to produce 90 MnT of high-quality ore, which is around 77% completed. Currently, Vale produces 340 MnT of ore in a year.
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