Chinese Spot Iron Ore Market Scenario in June’15

Monthly average spot iron ore fines (Fe 62%) prices moved up by USD 3/MT, M-o-M to USD 63/MT, CFR China.

Spot iron ore prices in China witnessed a marginal uptrend this month. Monthly average prices for Fe 62% prices moved up by USD 3/MT from USD 60/MT, CFR China, in May’15 to USD 63/MT, CFR China in June’15.

This month started at the level of USD 62/MT, CFR China, but ended at USD 59.3/MT, marking lowest this month. Talking about today ie 30 June’15, prices fell sharply by 2% against yesterday’s closure and stood at USD 59.3/MT, CFR China for Fe 62% fines.

Global Iron Ore Prices as on 30 June’15

CNF China prices
Source: SteelMint

In the beginning of Apr’15, spot iron ore prices had touched USD 47/MT, CFR China levels over grounds of increasing iron ore supplies from the world’s major miners and then gradually gained momentum.

Highlights of the month:

1. Steel market in China remained burdened with overcapacity and weak demand. According to China Iron & Steel Association, crude steel output in China is likely to shrink by 2% this year
2. Looking at dull steel demand in China and overcapacity, one of the major steelmakers, Baoshan Iron & Steel, slashed steel (hot rolled & cold rolled coils) prices for July’15 bookings
3. Construction activities which hold a major share of steel demand in China have not recovered much yet
4. The first week of the month noticed uptrend in prices over temporary shortage of availability of high grade ore. But later the prices fell over waning demand for steel
5. Also, iron ore market remained closed on 22 June’15 on account of dragon boat festival, as a result of which thin trade was noticed for a couple of days that followed
6. Roy Hill is likely to begin exporting iron ore later this year. The miner has a production capacity of 55 MnT pa. This might further add up to iron ore supply to China