According to a new report issued by the China Iron and Steel Association (CISA), as of October 31 this year imported iron ore inventory at Chinese ports totaled 128 million mt, increasing by 6.67 percent month on month. With the increases in iron ore supply, oversupply will continue in the iron ore market, which will negatively affect ore prices.
According to the CISA, as of October 31, the composite steel price index (CSPI) for the Chinese market was down 1.65 percent compared to the end of September, while it declined by 14.28 percent year on year, to 104.34 points. However, the China Iron Ore Price Index (CIOPI) was at 314.23 points as the end of October, down 6.94 percent compared to the end of September, shifting from a month-on-month rise to a decline. The statistics from the CISA showed that the aggregate gross profit registered by CISA-member steelmakers was down 32.01 percent year on year in the January-September period of the year, showing a month-on-month decline for the fourth consecutive month in September. China’s demand for iron ore will likely slacken, which will drag down iron ore prices further.
In the October 1-20 period this year, the average aggregate daily crude steel output for CISA-member steelmakers amounted to 2.599 million mt, down 5.8 percent compared to the average level in the same period of September. In the coming period, because of the implementation of production restriction measures for the winter season, crude steel output will likely decrease further, which will reduce demand for iron ore.
The current international situation is more complex and severe, and the domestic economy is still under considerable downward pressure, which will exert a negative impact on the steel industry and the demand for iron ore, the CISA said. Accordingly, it foresees that iron ore prices will likely edge down further amid the overall oversupply in the iron ore market.