Weak demand and dull buying sentiments in finished steel market in China, brought down seaborne iron ore prices by about USD 3/MT today.
Continuing the downtrend, iron ore prices in China declined today (i.e. 21 Nov’16) further by USD 2.8/MT, CFR China. Fe 62% fines index stood at USD 69.8/MT, CFR China.
Following reasons have resulted in plunge in Chinese iron ore prices:
1. Declining prices in Chinese finished steel market – Amid weakening domestic demand, Chinese HRC export offers have come down by USD 5-10/MT W-o-W.
2. Concerns over upcoming winter season – Concerns have started prevailing over weaker demand with the approaching winter season. Winter season in China spans from Dec-Feb during which prices fall amid limited trade activities. Specially in northern regions of China construction activities have come to a halt over snowy weather.
3. Increasing iron ore stock at Chinese major ports – Iron ore stock at 46 Chinese ports was recorded at 110.58 MnT on 18 Nov’16 (up by 2.6% W-o-W). This is the highest level of iron ore stock since Sept’14.
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