Chinese spot Iron ore prices fall down after continuous rise for three consecutive weeks.
Chinese spot Iron ore prices are now witnessing a downtrend after continuous increase form past three weeks. This is because of the limited buying interest from Chinese mills which is unlikely to pick up amid sluggish Steel demand.
China’s Steel prices have declined by over 5% in past two months and remained weak in November as well. China is the world’s largest Steel consumer and producer. Steel giants of China such as Baoshan Iron and Steel have kept prices firm for December expecting demand to remain unchanged.
“Mills are not running slim on inventory and I feel prices should drop because fundamentals are quiet weak. We have already overstocked because we have crossed half a million tonnes (MnT) of cargo, but there’s no need for us to panic given that the market’s been really stable. So we are just waiting for better offers.” Iron ore 62 grade at Tianjin port eased 10 cents to USD 136.30 per MT on 21 Nov, 2013. Iron ore prices which have decreased 0.4% so far this week are at around USD 131-138 since September. Imported Iron ore stocks at major Chinese ports increased to 80 MnT last week amid higher seaborne supply, reflecting increased production from its main suppliers Australia and Brazil. According to the Commonwealth Bank of Australia, “In our view, it’s entirely possible that the combination of slowing Chinese domestic Iron ore supply and the pre-winter Steel mill Iron ore restock cycle can support Iron ore inventories at average-to-tight consumption ratios, hence supporting prices. But the creeping growth in seaborne supply over coming months cannot be ignored. It’s for this reason we expect Iron ore prices to ease gradually over coming months towards levels around USD 115 to USD 125 per MT”, According to the Commonwealth Bank of Australia.