Global iron ore prices are assessed at USD 62/MT, CFR China on 24 Aug’16. Prices continue to hover around 4-month high as such levels were last seen in the month of Apr’16.
The gradual uptick in iron ore prices has likely given the strong steel market. However, most end-uses still kept themselves away due to uncertainty in the market directions.
Chinese spot steel market is also on upward trend. Today, spot billet prices rose by RMB 10/MT and are currently at RMB 2,350/MT (USD 356/MT). On similar lines, spot rebar prices also rose by RMB 10/MT today.
One of the market participants mentioned that many Chinese mills are withholding iron ore procurement as the market is uncertain and they expects that prices will correct soon.
Iron ore inventories at major Chinese ports are also currently at highest in two years. The stock has climbed to 108.4 MnT as on 22 Aug’16, 32% higher than a year ago. The inventories now are highest since August 2014.
Due to the announcement of production cut by 50% in China’s bloated steel sector and ongoing environmental inspection in Chinese mills, Chinese steel prices extends gains.
In addition, increasing iron ore imports by China which record second highest at 88.4 MnT last month have compelled domestic mining capacities to shut down. It is believed that increased iron ore supply from world’s major iron ore producer to China will increase imports further and China may register a mark of 1 BnT iron ore imports in 2016.
Rising imports will surely pressurize global iron ore market and prices may drop down in the coming term.
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