India Steel Market Watch
December 10: Spot iron ore prices in China dropped to their weakest amidst apprehensions that falling steel consumption in the world's biggest consumer could shut down more producers, cutting demand for the raw material.
Spot iron ore fell to $39 a ton bringing its year-to-date decline to more than 46%, far more than crude oil and copper that are similarly hit by oversupply.
"The sentiment is still quite bearish," said a source, adding: "We're not seeing a lot of bids."
More steel mills in China could close in the next few months, he warned, with no sign that demand could pick up any time soon.
Some Chinese steel producers have either reduced output or shut down completely as consumption continued to shrink this year after falling in 2014 for the first time in more than three decades due to a slowing economy.
Amid a weak domestic market, China's steel exports topped 100 million tons for the first time this year as producers shipped more surplus output overseas, many of them availing of Beijing's tax rebates that help them outprice rivals.
"If China's steel product export growth slows due to trade barriers, we could see a glut of steel in China push down domestic steel prices, likely translating through to weaker iron ore prices due to margin pressure," Commonwealth Bank of Australia said in a note.
Construction-used rebar prices slipped 0.4 percent to 1,651 yuan a ton on the Shanghai Futures Exchange. They touched a record low of 1,618 yuan a ton on December 1.
Following are prevailing iron ore prices in international markets:
Grade % Fe |
Origin |
Product |
load port |
destination |
Dec 10, 2015: cfr ($/ton) |
Dec 9, 2015: cfr ($/ton) |
Dec 8, 2015: cfr ($/ton) |
63.5/63 |
India |
Fines |
Vizag |
Qingdao |
39 |
39 |
40 |
62 |
India |
Fines |
FOB Vizag |
|
7 |
7 |
8 |
62 |
Australia |
PB |
Dampier |
Tianjin |
39 |
39 |
40 |
63.5 |
Brazil |
Fines |
Brazil |
China |
41 |
41 |
42 |
Source: Traders