Whereas China's steel output has remained at high levels as domestic steel demand has indicated some increases due to the Chinese government's stabilization policy and also given the significant rises seen in export volumes, the growth observed in pig iron output has been limited, restricting demand for iron ore and resulting in oversupply in the iron ore market, according to a report issued by the China Iron and Steel Association (CISA) on August 7. It is expected that import iron ore prices in China will continue to fluctuate on a slight downtrend in the coming period, the CISA said.
At the end of July this year, the China Iron Ore Price Index (CIOPI) stood at 327.62 points, up 0.77 points or 0.24 percent month on month. In particular, the domestic production iron ore price index stood at 282.62 points, down 3.52 points or 1.23 percent month on month, while the imported iron ore price index stood at 347.98 points, up 2.7 points or 0.78 percent month on month.
Meanwhile, the composite steel price index (CSPI) for the Chinese domestic market was at 91.88 points at the end of July, down 1.11 points or 1.19 percent month on month, remaining below 100 points for the 10th consecutive month. Iron ore prices are considered to be at relatively high levels compared to finished steel prices and so it is expected that iron ore prices will soften further in the coming period.