SteelOrbis Shanghai
Chinese
iron ore market has remained stable throughout the week. But some miners are getting more and more prudent, as the prices tend to soften. The business activity for domestic ore is getting better, while that of imported ore has weakened further. The inventory in steel mills remains at the normal level.
According to the latest figures from the
China's Iron and Steel Association (CISA), Chinese
iron ore output in March increased 42.4 percent to 45.56 million metric tons from a year earlier, while the January-March cumulative output reached 102.94 million metric tons, up 32.8 percent year on year.
The increase in supply is the chief reason of the currently weak market prices. Even though some mills have cut their purchasing prices, they still have enough ore inventories. The turnover period shifted from 45 to 90 days and from 30 to 45 days.
Purchase price decrease of some steel mills in northern
China was quite large, leading to a more sluggish business activity. However, the currently good condition of the finished steel market is adding to miners' confidence in the future of the market. Nevertheless, currently most miners are not very active in selling products, while some miners have even started decreasing their prices because of their pessimism as the international
iron ore price negotiations have not reached a conclusion yet. East
China markets are stable entirely, but some large scale miners have large inventory pressures. The southern iron concentrate market has also remained steady.
As the
iron ore market is bearish, steelmakers are cutting their purchasing prices to reduce costs. More and more traders have left the
iron ore market, because their profits saw some squeeze and the transaction volume decreased.
The sales figure of imported ore is not favorable, but the trade for low iron content ore was active. On April 14, the
iron ore inventory at
China's 23 major ports totaled 40.21 million metric tons, up 960,000 metric tons from the previous week. Among the total number, about 8.81 million metric tons are Indian ore.
According to the guiding prices announced by CCCMC, the prices of imported 63.5 percent Indian ore are at $53-54/mt FOB, equal to the level of the previous week. The ocean
freight from west coast of
India to Chinese Tianjin Port has decreased $1 to $16/mt over the preivous week. Therefore, the CIF price is at around $69-70/mt.
To sum up, Chinese
iron ore market is expected to remain weak with slight decreases in the short term.