Iron ore inventory at Chinese ports drops below 100 million mt
As of December 22, inventory of iron ore at 33 major Chinese ports amounted to 99.18 million mt, down 3.96 million mt or 3.84 percent compared to the inventory level recorded on December 15, as announced by China’s Xinhua News Agency.
As of the same date, the Xinhua-China Iron Ore Price Index for imported iron ore with 62 percent iron content was at 69 points, down one point week on week. Meanwhile, the Xinhua-China Iron Ore Price Index for imported iron ore with 58 percent iron content was at 60 points on the date in question, also down one point week on week.
During the given week, both traders and steelmakers have come under strong pressure from tight liquidity as the end of the year approaches, resulting in declining trends for prices and purchasing activity for imported iron ore. Traders have been importing less iron ore, resulting in reduced imported iron ore inventory at Chinese ports, with inventory levels dropping below 100 million mt for the first time in the past 10 months.
Currently, since bearish sentiment prevails in the finished steel market, domestic steelmakers have cut their sales prices in order to bring in cash, thereby narrowing their profit margins. Accordingly Chinese steelmakers will likely seek to pay lower prices for imported iron ore. It is expected that imported iron ore prices in the Chinese market will continue their slight downtrend in the coming week.