Global iron ore prices are assessed at USD 61/MT, CFR China on 10 Aug’16.
Iron ore prices are up as Chinese steel is strengthening. Currently, stronger margins among Chinese steel producers have increased appetite for raw material, lifting iron ore prices up to USD 61/MT.
Chinese spot billet prices also rose by RMB 10/MT. Current prices for 150 * 150 mm Chinese billet are at RMB 2,200/MT (USD 333/MT).
Shanghai rebar also rose by RMB 40/MT (USD 6/MT). Current prices for Shanghai rebar are RMB 2,400/MT (USD 363/MT), up by RMB 120/MT M-o-M.
In addition, Chinese billet export offers rise amid government’s ongoing investigation on tax rebates enjoyed by Chinese steel mills on exporting billets in the name of square bars. Chinese billet export prices have increased by USD 5/MT to around USD 325-330/MT, FoB China main port as compared to USD 320-325/MT, FoB last week.
Alongside, China’s iron ore imports in the month of Jul’16 hit highest of 2016 at 88.4 MnT. Iron ore imports rose 2.7% Y-o-Y. Also, Chinese steel exports also rose by 5.3% Y-o-Y.
Iron ore demand in China is likely to drive down as Chinese steel production may fall by the end of this year. There will continuous series of events and environmental inspections in China, which will keep steel mills away from producing steel, hence driving down iron ore demand too.
Many Chinese provinces and central government-owned steel enterprises have announced de-capacity targets also.
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