Iron ore prices in China will likely fluctuate on a downward trend in the coming period due to the reduction in finished steel output in China against the background of the overall sluggishness in the domestic finished steel market and the approach of the traditional slack season for the finished steel industry, as announced by the China Iron and Steel Association (CISA).
As of October 31, the composite steel price index (CSPI) in China stood at 59.44 points, down 23.65 points or 28.46 percent compared to the beginning of the year, with the lower prices negatively influencing demand for iron ore.
According to the CISA, as of October 31 this year, iron ore inventory held by 26 major Chinese steel enterprises amounted to 22.62 million mt, down 5.99 percent month on month, while imported iron ore inventory at Chinese ports totaled 84.45 million mt, decreasing by 1.25 percent month on month. In the January-September period of this year, China’s domestic pig iron output decreased by 17.82 million mt, while iron ore imports increased by 220,000 mt, both year on year, reflecting the ongoing oversupply situation in the iron ore market.
The CISA concluded by stating that iron ore prices in China will likely fluctuate in a downward direction in the coming period, while the reductions in finished steel output are expected to contribute to the downward movement of iron ore prices.