Global iron ore prices are assessed at USD 61/MT, CFR China on 27 Apr’16.
Recent rapid price gain have defined the supply-demand fundamentals of iron ore. Iron ore and steel prices picked up significantly in recent weeks.This was due to seasonal pickup in construction activity and to lower-than-usual inventories following a reduction in steel production last year.
Alongside, Chinese major iron ore ports seen less activity as the steel mills have sufficiently restocked the raw material.
One of the market participant mentioned “Mills in Tangshan have about 15-20 days’ worth of iron ore stockpiled, some higher, some lower, but they all have at least a week’s worth of sintered ore,”
Spot prices of square billet dropped down by RMB 120/MT(USD 18/MT) on day to RMB 2,430/MT (USD374.5/MT) ex-stock Tangshan.Chinese production cutbacks and transportation limits on cargo trucks, to secure air quality for International Horticultural Exposition that is going to be opening on 29 Apr’16 will bring impact on their iron ore demand.
Meanwhile, in Mar’16, China produced 98.1 MnT crude iron ore, which is down by 5% from a year ago.The total iron ore production was 261.5 MnT in Q1, down 14.6 MnT or 5.3% from a year ago. On similar lines, Chinese iron ore imports increased by 8% M-o-M in Mar’16.
Market analysts still anticipates that there is a risk of a bigger correction in the coming time. There is still doubt the rapid increase in iron ore price will sustain, and global iron ore prices are likely to touch to a level of USD 55-56/MT in the coming term.
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