As of June 3, inventory of iron ore at 25 major Chinese ports amounted to 74.43 million mt, indicating an increase of 280,000 mt or 0.38 percent on week-on-week basis, as announced by China's Xinhua News Agency.
As of the same date, the Xinhua-China Iron Ore Price Index for imported iron ore with 63.5 percent iron content was at 111 points, down 12 points week on week. Meanwhile, the Xinhua-China Iron Ore Price Index for imported iron ore with 58 percent iron content was at 96 points on the given date, down 11 points week on week.
In the past week, Chinese import iron ore prices have indicated a sharp decline, with ex-Australia iron ore prices to China decreasing by over $10/mt.
The enthusiasm of Chinese mills for purchasing iron ore has decreased and overseas exporters have started to panic somewhat due to the deviation of the iron ore market trend from market players' previous predictions. Market confidence has also weakened as iron ore inventory at Chinese ports has increased for four straight weeks and amid the declines in iron ore prices.
Adequate iron ore market supply and sluggish demand for finished steel have meant that Chinese mills have been keeping their raw material inventories at low levels while they continue their production, and so they are just buying iron ore in line with their needs. With the approach of the Dragon Boat Festival (June 10-12), the small volume purchases of some buyers provide little support for the iron ore market.
It is thought that the Chinese iron ore import market will indicate a further softening in the coming days.