According to a new report issued by the China Iron and Steel Association (CISA), as of December 31 this year imported iron ore inventory at Chinese ports totaled 127 million mt, increasing by 2.53 percent month on month. With the approach of the Chinese New Year holiday, steelmakers built up some stocks of imported iron ore, resulting in rises in iron ore inventory levels, while sufficient supply of iron ore will exert a negative impact on iron ore prices.
According to the CISA, as of December 31, the composite steel price index (CSPI) for the Chinese market was down 1.91 percent compared to the end of November, to 106.10 points. However, the China Iron Ore Price Index (CIOPI) was at 333.04 points as the end of December, up 4.29 percent compared to the end of November, 2.66 percentage points higher than the growth rate recorded in November. Finished steel prices followed the opposite trend to iron ore prices, and so iron ore prices are unlikely to continue their upward trend in the future.
In the December 1-20 period this year, the average aggregate daily crude steel output for CISA-member steelmakers amounted to 2.6338 million mt, down 1.58 percent compared to the average level in the same period of November. The steel output will likely see a further decline in the near future amid the offseason during the cold winter weather and the approaching holiday, which will reduce demand for iron ore. Accordingly, the CISA foresees that iron ore prices will likely edge down in the coming period.