According to a new report issued by the China Iron and Steel Association (CISA), iron ore prices have been relatively high in China lately, while there are factors which may push prices down in the current month.
As of March 31 this year, imported iron ore inventory at Chinese ports totaled 117 million mt, down 4.75 million mt or 4.06 percent month on month. Since October 2019 import iron ore inventories in China have been in the range of 117-128 million mt.
According to the CISA, as of March 31, the composite steel price index (CSPI) for the Chinese market was down 1.07 percent compared to the end of February, falling to 97.52 points. However, the China Iron Ore Price Index (CIOPI) was at 309.24 points at the end of March, down 0.66 percent compared to the end of February. Finished steel prices have shown an obviously stronger downtrend compared to the relatively high iron ore prices, indicating that iron ore prices will likely edge down in the future.
In late March (March 21-31) this year, the average aggregate daily crude steel output of large and medium-sized steel enterprises in China - all CISA members - totaled 1.8269 million mt, down 0.53 percent compared to mid-March (March 11-20).
Though the coronavirus has been effectively controlled in China, the full-scale recovery of demand for finished steel requires more time, and so demand for iron ore will unlikely indicate a rapid rise. Accordingly, the CISA foresees that iron ore prices will edge down further in the coming period.