Global iron ore prices are assessed at around USD 40.5/MT, CFR China on 28 Dec’15. Prices have been almost stable since last week as it touched to a level of USD 37/MT (all time low).
Although, prices are moving up, but this increase is temporary as few more major factors like oversupply and steel demand may pull down prices further.
Some trade activities have been seen in the China’s iron ore market. Rio Tinto, one of the major iron ore producers, sold 170,000 MT Fe 61% Australian fines through tender at USD 40.9/MT, CFR China for Jan’16 end deliveries.
Oversupply of iron ore and shrinking steel demand have affected iron ore prices. On the other hand, Chinese steel demand continues to shrink from the starting of this year. Some Chinese mills have stopped production and are not in a position to resume soon.
However, this will somehow support steel prices, which may get some support in near term. But, this will affect iron ore prices as demand may not increase in near term.
However, this news could not be enough for iron ore market. Analysts anticipate that iron ore prices may fall below USD 30/MT in the next few months as low cost upcoming projects by major iron ore producers will force high cost iron ore to move out of the market.
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