Global iron ore prices are assessed at USD 61/MT, CFR China on 4 May’16. Prices dropped down by USD 4/MT in a week time. Prices have down due to weakening spot billet prices and rising iron ore inventories.
Iron ore inventories at Chinese major ports have touched to a level of 100.3 MnT, up by 2 MnT as on 29 Apr’16. Amid declining global prices, people are hesitant to book cargoes in hopes that prices will decline further, leading to an increase in inventories at Chinese major ports.
Meanwhile, spot steel billet prices are also declining down. Prices for spot billet are assessed at RMB 2,290/MT (USD 352/MT), down by RMB 200/MT (USD 30/MT) in just last 3 days. Chinese billet export offers for Q235, 150*150 mm are assessed in the range of USD 380-390/MT, FoB Chinese port, which were hovering within USD 400-410/MT, FoB last week.
Market participants are confused and not too pessimistic about the prices for rest of the year, as they are in the opinion that their will ramp-up in production by Chinese mills which would again provide support to the raw material market. On the other hand, few market analysts anticipate that global iron ore prices will decline down to a level of USD 50-52/MT shortly.
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