Global iron ore prices remained stable at USD 81/MT, CFR China as on 19 Dec’16 as steel prices and futures dropped down amid announcement of production cut.
Iron ore demand remained dull due to pollution cut measures taken in the Hebei region. In addition, Tangshan has also ordered sintering operations cut by 50% amid ongoing red alerts on air pollution.
Chinese port inventories are currently at 2 years high. It has touched to the level of 111.55 MnT last week. Meanwhile, at Tianjin Port, all the shipping activities are suspended in response to the government decision to take emergency measures to handle severe pollution from Dec 16-21.
Chinese iron ore and steel futures moved down by 7.2% and 5.7% respectively.
It is noted that spot iron ore prices have witnessed a tremendous gain this year. Prices which remained at the level of USD 41-43/MT, CFR China in Jan’16 have almost doubled and currently reached at USD 81/MT, CFR China in Dec’16.
Market participants still believe that iron ore supply will remain abundant and with recent Yuan depreciation, the iron ore prices are likely to go down further.
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