China Iron Ore Price Stable; Future Gloomy

China’s weak steel demand is likely to put iron ore prices under pressure, which may cause further price fall.

Today, spot iron ore fines (Fe 62%) prices witnessed slight reduction and stood at USD 56.8/MT CFR China. Prices had remained stable at USD 57/MT, CFR China at the start of this week. Prices for Shanghai rebar also fell and stood at USD 299/MT.

Reasons for fall in prices could be no-pick up in seasonal demand. Also, sellers’ eagerness to sell their products at lesser prices in order to sustain in the market could be a reason for the slight fall in prices. There is no profit for manufacturers on steel.

In China, week steel demand has created pressure on iron ore prices, owing to which, some mills have slashed their prices in order to sustain in the market and stimulate sales.

Chinese iron ore market is still cold and there is no-pick up in demand in the current time. Market participants anticipate that prices may fall further in the coming weeks.

Although, prices remained unchanged in last two days as Chinese steel mills and iron ore miners are ready to conduct the annual China conference this week. This is usually a good platform for traders to make profitable deals, but owing to weak demand, the conference may not be much beneficial for them.

In addition, over availability of iron ore and weak demand has eroded prices of iron ore as well as steel. Still, new project by Western Australia named “Roy Hill” will make the situation even worse, as it is ready to make its first shipment by next month. This may force prices to fall further. 

Global iron ore Prices as on 23 Sept’15

CNF China prices
Source: SteelMint