Global Iron Ore Market Review of Sept’16

Global iron ore prices remained stable at USD 56/MT, CFR China in Sept’16 due to less trade activities ahead of National Week Holidays between 01 Oct-07 Oct’16.

Overall Chinese market remained dull because of G-20 summit held in September in which steel mills were asked to cut steel production in order to control the environmental pollution which lead to limited iron ore trade activities.

Iron ore monthly average iron ore prices for Fe 62% Australian fines stood at USD 57/MT, CFR China in Sept’16, down by USD 4/MT as compared to USD 61/MT, CFR China in Aug’16.

Market drivers of the month

1. Iron ore prices were stable due to lack of trade activities. Chinese mills pre-stocked sufficient quantity of raw material before holidays.
2. Chinese domestic billet offers went down by RMB 100/MT( USD 15 /MT) in the month. Prices of domestic billet were witnessed at USD 332/MT as on 30 Sept’16.
3. Chinese billet export offers for 150*150 mm are currently hovering within USD 330/MT, FoB China, down USD 25/MT in a month time.
4. Chinese rebar domestic offers / spot rebar prices for HRB 400 grade (25 mm) in Beijing declined by RMB 60/MT (USD 9/MT) within a month and stood at around RMB 2,390/MT (USD 358). The same grade material was available in Shanghai at RMB 2,280/MT (USD 341), offers were down by RMB 140/MT (USD 40/MT) for the same duration.
5. Chinese rebar export offers stood at USD 335-340/MT, FoB China down by USD 25/MT in a month time.
6. Indian iron ore fines offer for Fe 57 / 58%. Low-grade iron ore is hovering in the range of USD 28-30/MT, FoB India. Indian iron ore exports rose by 68% in Sept’16 owing to retreated monsoon. Exports from Odisha doubled in Sept’16 and was recorded at 0.53 MnT against 0.29 MnT in Jul’16.
7. China’s iron ore imports in the month of Sept’16 was recorded at 87.72 MnT . Iron ore imports remained stable M-o-M and increased by 18.3% Y-o-Y. 
8. China, the world’s largest iron ore consumer, produced around 115.1 MnT ROM (run-of-mine) in Aug’16. Crude ore production fell slightly by 0.5% M-o-M and 7.1% Y-o-Y.
9. Stockpiles at major Chinese ports are at 101.8 MnT as on 30 Sept’16.
10. Chinese steel export registered a fall of 12.5% in Aug’16 and was recorded at 9.01 MnT in Aug’16 against 10.3 MnT in Jul’16.
11. Iron ore demand in China is likely to drive down as Chinese steel production may fall by the end of this year. There are continuous series of events and environmental inspections in China, which will keep steel mills away from producing steel.
12. Global iron ore prices are likely to remain under pressure in the coming term due to continuous increase in global supply, firm Chinese crude iron ore production, increasing Chinese imports, crude steel production and reducing steel prices.