Iron ore spot market remains quiet in China
June 6, 2008
June 6th (Steel Guru) – It is reported that an influx of imported ore coupled with soaring domestic ore production has crippled the fundamental market balance in China and depressed the spot ore imports price since second quarter of this year.
In particular, the ore imports tonnage in April surged by 20% MoM to 42.84 million tonnes. Out of this, the imports from India went up by 42.3% from March to 12.55 million tonnes. In addition 12.7% growth was seen for imports from Brazil and 11.14% from Australia. Meanwhile domestic crude ore output has risen by 21.6% YoY to 235.49 million tonnes in the first four months.
Therefore, the iron ore supply to domestic market has reached 271.28 million tonnes while the iron ore demand is estimated at 258.04 million tonnes converted from steel output in the review period. And the iron ore supply has exceeded the demand by over 10%.
A number of Chinese iron ore traders have piled up vast amount of iron ore at seaports in anticipation for further price spike due to the protracted ore talks with Australian ore miners. As a result, the seaport ore stock has hit nearly 80 million tonnes as of May 15th 2008 putting ore imports price under downward pressure since Q2.
Currently, spot price of Fe 63.5% Indian ore fine weakens to USD 180 per tonne to USD 182 per tonne CIF down by USD 10 per tonne from the month before. And lower grade ore price has fallen over 10%. However, slipping ore price has failed to attract sufficient buying, indicating that buyers are looking for further price decline.