Iron ore inventory decreases at Chinese ports
As of March 23, inventory of iron ore at 33 major Chinese ports amounted to 96.56 million mt, down 1.84 million mt or 1.87 percent compared to the inventory level recorded on March 17, as announced by China’s Xinhua News Agency on March 24.
As of the same date, the Xinhua-China Iron Ore Price Index for imported iron ore with 62 percent iron content was at 55 points, down three points week on week. Meanwhile, the Xinhua-China Iron Ore Price Index for imported iron ore with 58 percent iron content was at 47 points on the date in question, down two points week on week.
During the given week, imported iron ore prices have indicated a sharp declining trend, while transaction activity has been slack, with market participants mostly holding a wait-and-see stance. Meanwhile, finished steel prices have moved on a rising trend, which, however, did not provide support for imported iron ore prices. The average daily crude steel output in China was down 5.1 percent in early March compared to late February (February 21-28), raising concerns about the finished steel market. Iron ore futures prices have seen a sharp decline, exerting downward pressure on imported iron ore prices at Chinese ports.
In the short term, domestic finished steel prices will likely move on a rising trend, while the rising steel product inventory levels on the steelmakers’ side reflect the difficulties they face in concluding sales. Moreover, due to strict environmental protection measures, more domestic steelmakers will likely halt or restrict their production, which will exert a negative impact on iron ore prices. It is thought that imported iron ore prices will likely move on a stable trend in the coming week.