In global market, iron ore prices were seen at the level of USD 50.9/MT, CFR China on 23 Oct’15. Prices at these level were last seen on 27 Jul’15. Globally, iron ore prices are under pressure due to weak steel prices in China, which has prompted mills to curb production. Today, although prices of spot billet were steady, prices for Shanghai rebar fell by RMB 10/MT.
Chinese steel mills are now opting for production cut on the backdrop of slow Chinese economical growth and low domestic demand. Also, exports from China are seems to be somewhat un-viable as the government had imposed anti-dumping as well as safeguard duty from few areas on steel export.
Global iron ore market has a problem with oversupply. The major iron ore producers across the world namely Rio Tinto, Vale and BHP Billiton have recently published their quarterly reports and signify that they will retain the individual iron ore production target for this year.
In addition, the three giants have increased their production in last quarter, resulting in high production of iron ore within this quarter. This could definitely drive down prices and may sink early next year.
Market analysts anticipate that iron ore prices may touch to a level of USD 40/MT or lower by March-end in 2016. The overall weak consumption of iron ore in China due to weak economy, and less viability of steel exports and oversupply of low cost iron ore by may force prices at USD 40-45/MT in coming term.
Leave a Reply