Global iron ore prices were assessed at USD 47.7/MT, CFR China on 05 Nov’15. Prices have already touched 4-month low and still heading towards further fall. Today, Spot billet prices were down by RMB 10/MT and Shanghai steel prices dipped to record low owing to slow economy growth.
Low demand for iron ore and soft steel prices in China have led to persistent increase in inventory at major Chinese ports. Moreover, it is expected to increase further, if the situation persist too long.
Rio Tinto, the world’s 2nd largest iron ore producer after Vale, expects strong growth in iron ore demand in countries outside China as the global seaborne market is expanding.
Market analysts anticipate that Chinese steel prices will continue to drift lower in the coming term as winter season is approaching. As supply and demand continue to diverge, prices may fall below production costs and touch to a level of USD 45/MT by Mar’16 end.
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