Global iron ore prices are assessed at USD 42.5/MT, CFR China on 30 Dec’15.
Prices are up on account of rise in Shanghai rebar prices and an increase in rebar trade activities . However, this price rally seems to be temporary as majority of steel mills in China continues to cut production or remain shut. As mills cut production, demand for iron ore will surely decrease.
Also, there is some improvement in export orders received by mill owners in China because of which steel prices are moving up following which iron ore prices have also moved up further.
A trade offer by BHP Billiton of 90,000 MT Fe 67.7% Australian fines was offered at USD 44.4/MT CFR China. According to participants, the trade deal had been concluded at USD 42.2/MT CFR China.
Traditionally, global supply slows down in the month of January and February. Domestic steel mills in China are currently buying sufficient raw material fearing less supply in the coming two months.
As of now, due to year end price rally in steel prices, iron ore prices are moving up, but in the coming time iron ore prices may fall upto USD 30/MT owing to influx of more low cost iron ore by upcoming iron ore projects by major producers.
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