Global iron ore prices are assessed at USD 53.5/MT, CFR China on 13 May’16. Prices are down by USD 11/MT starting May’16 as it was at USD 65/MT, CFR China at the end of last month.
Prices are down as Chinese exchange has raised trading fees and margins under exchange, trying to reduce speculative trading to some extent. Alongside, declining spot steel sentiments have also impacted global iron ore prices.
Chinese billet domestic offers have been declining persistently and get corrected by RMB 200/MT (USD 31/MT) since a week. But, the market started to show some recovery from the last couple of days. Today, Chinese billet prices remained at RMB 1,990/MT (USD 306/MT). Spot rebar price drop by RMB 100/MT (USD 15.3/MT) today.
Iron ore stockpiles at ports in China are near 100 MnT as on 06 May’16. Lower steel prices erode mills’ margins, cutting their ability to restock on iron ore.
Steel demand in China is lackluster which had hit buying interest of steel makers. Some steel producers are trying to lower their steel prices so as to attract buying; but even so it is still difficult to stimulate downstream demand.
Currently, steelmakers had demand for iron ore although they took wait-and-watch attitude for the time being. Therefore, iron ore traders chose to hold back and wait for steelmakers’ procurement in near future.
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