Global Iron Ore Prices Stable on Limited Trade Volume

Tianjin Port resumes deliveries. Chinese steel mills show lower buying interest due to sufficient inventories.

Iron ore prices in China are getting stable post Tianjin Port resumed deliveries. China’s Tianjin Port, is the world’s 10th largest port in terms of container volume, and imported 25 MnT iron ore in the first half of 2015. The explosion on 12 Aug’15 at Tianjin brought about closure of movement of cargoes and caused delayed shipping which temporarily lifted spot iron ore prices last week.

Now, iron ore deliveries from Tianjin Port have resumed and the steelmakers have begun delivering the raw material through trucks to their respective steel mills.

Demand of iron ore by Chinese steel mills is persistently low as they are occupied with sufficient inventories of iron ore before production cut is announced by government.

If we look back past few weeks, prices found some support and gained on the back of Chinese government’s soon to be announced production cut between 20 Aug’15-03 Sep’15 during commemoration of 70th Anniversary of World War 2. Secondly, recent massive explosion at Tianjin Port, which halted the iron ore deliveries to steel mills, also led global iron ore prices to find support and lift temporarily. Thirdly, iron ore prices geared up on account of lesser exports from Australia and Brazil.

Prices May Fall Further

Iron ore prices gained 4% last week owing to massive explosion at Tianjin Port But, even this slight recovery did not give relief to steel mills. Despite this upward price fluctuation over last week, prices still are at levels lower as compared to last year. If Chinese steel production lowers down in coming time, demand of iron ore may crumble and prices may fall further.

Global Iron Ore Prices as on 18 Aug’15

Today, spot iron ore prices stood at USD 56/MT CFR, China. Prices remained unchanged against yesterday’s closure.

China’s Rebar Future dips by USD 3/MT and local billet price also went down by USD 4/MT to USD 270-275/MT from last week’s trade.

CNF China Prices
Source: SteelMint