According to a new report issued by the China Iron and Steel Association (CISA), as of January 23 this year (just before the Chinese New Year holiday) imported iron ore inventory at Chinese ports totaled 124 million mt, decreasing by 2.36 percent compared to December 31 last year. In early February, inventory of imported iron ore at Chinese ports has risen slightly, indicating stable supply of iron ore.
According to the CISA, as of February 7, the composite steel price index (CSPI) for the Chinese market was down 2.24 percent compared to the end of January, to 103.86 points, down 2.73 percent year on year. However, the China Iron Ore Price Index (CIOPI) was at 344.95 points at the end of January, up 3.58 percent compared to the end of December, 0.71 percentage points lower than the growth rate recorded in December. Finished steel prices have shown the opposite trend to iron ore prices, indicating that iron ore prices will likely move down in the future.
In mid-January (January 11-20) this year the average aggregate daily crude steel output of large and medium-sized steel enterprises in China - all CISA members - totaled 1.9747 million mt, up 0.35 percent compared to early January (January 1-10). However, due to the coronavirus, downstream industries have been required to extend their holiday period and implement sufficient measures ahead of production resumption to control the spread of the virus, which will exert a negative impact on steel demand. Steelmakers in China will lower their capacity utilization rates, which will lead to the weakening of demand for iron ore. Accordingly, the CISA foresees that iron ore prices will likely move down in the coming period.