Continuing the uptrend of last week spot iron lump premium has moved up further by 25% this week.
Spot iron lump premium has increased by USD 0.0125/dry MT unit this week. Lump premium for Fe 62% was assesed at USD 0.0625/dry MT unit today i.e. 31st Dec’15.
Lump premium was last seen at this level towards end of Oct’15 after which it observed a downtrend.
Global iron ore prices have also gained strength in last couple of weeks over increase in rebar prices amid short supply. Iron ore stock at Chinese ports remained stable in last week of Dec’15 and stood at 95.8 MnT as on 25 Dec’15.
However market participants expect that iron ore prices might remain high probably till mid of Jan’16 and then experience a downturn again owing to shrinking steel output.
China’s crude steel output is expected to fall for 2nd year in a row in 2016. As per annual report of Metallurgical Industry Planning and Research Institute (MPI) production would fall 3.1% percent to 781 MnT in 2016. This will lead to reduction in iron ore consumption by 4.2%.
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