Global Iron Ore Market Drivers in Jan’16

Global iron ore prices almost remained unchanged throughout Jan’16. Prices remained in the range of USD 41-42/MT CFR China.

Market drivers of the month

1.China’s market still surrounded by dwindling demand and slow economic growth. The country is still facing worst time starting 2015, due to overall dull iron ore demand and weak steel consumption.

2. Due to upcoming Chinese New Year Holidays from 07 Feb to 13 Feb’16, Chinese still mills did pre-stocking of raw material because of which there was little fluctuation in the global iron ore prices.

3. China, world’s top buyer, imported 953 MnT iron ore in 2015, highest since 2012. Top iron ore exporter to China was Australia, following Brazil, South Africa, Ukraine and Iran.

4. Suspension in operations of Vale’s Tubarao port by court on pollution concerns also affected global iron ore prices for a temporary period. The port handles around 300 MnT of annual iron ore exports from Brazil.

5. The well known Rio Tinto, released its operational review in 2015. The company produced 327 MnT iron ore in 2015, misses annual target by 4%. For 2016, the company aims to produce 350 MnT iron ore from its operations in Australia and Canada, subject to weather conditions.

6. Australian BHP Biliton, had also released its operational review for first six months of Australian FY16. The miner produced 118 MnT iron ore, however reduced its production guidance by 10 MnT and expects to produce 237 MnT in Australian FY16.

7. By the end of Jan’16, iron ore inventories at major Chinese ports reached 100 MnT, which was highest since May’15. Higher iron ore holdings was due to increased supplies of low cost output from Australia and Brazil.

8. Chinese crude steel production recorded at all time low in 2015. According to data released by China customs, the country produced 803 MnT crude steel in 2015. Also, on pollution norms, Chinese government has announced a production cut of 100-150 MnT pa for this year.

9. Chinese steel exports recorded all time high in 2015. The country shipped 112.4 MnT steel products.