Weak supply-demand fundamentals in China have attributed to recent pullback of iron ore price rally. After a historic price gain of USD 12/MT in a day time on 09 Mar’16, prices are again moving down and reached at USD 51.7/MT, CFR China on 15 Mar’16.
Gain in iron ore prices was speculated to be because of sudden hike in Chinese steel prices. But, now as the steel prices are again loosing momentum in China, global iron ore prices had also pulled down to USD 7/MT in a week time.
Chinese spot billet prices have sharply dropped down. Upon increase in iron ore prices, domestic billet prices were seen at RMB 2,140/MT (USD 329/MT) Ex- Tangshan and today the prices have witnessed a fall of USD 53/MT and assessed at RMB 1,800/MT (USD 276/MT), Ex- Tangshan.On similar lines, Shanghai rebar prices have also dropped down and assessed at USD 305/MT.
Overall buying interest was thin as not many buyers were willing to take up the risk to purchase cargoes as market is so volatile. Today, Vedanta Ltd, offered two cargoes each of 85,000 MT of Fe 57% fines via a tender.
Indian iron ore offers moved up upon increase in global prices
As global iron ore shoot up to USD 63/MT on 09 Mar’16, the result had been seen in Indian iron ore prices also.
NMDC, the largest iron ore producer has raised their offers by 8% keeping in mind the sudden hike in global iron ore prices for March deliveries. In line, Odisha based miners have also increased offered for lumps and fines by INR 200/MT (USD 3/MT). Alongside, the booking price for Karnakata’s iron ore e-auction have also moved up significantly compared to base prices.
On the other side, Goa miners and exporters also remained indifferent to the stance expecting that sudden pick may remain unsustainable. Goa mainly exports low grade ore to China.
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