India Steel Market Watch
December 3: Iron ore is likely to drop to lows below $40 a ton, with shrinking steel demand forcing Chinese producers to cut output while there are no signs that top iron ore miners will curb production.
The commodity has been hit hardest by a slowing Chinese economy. Iron ore has lost 43% this year - far more than oil and copper - as growing low-cost supply dynamics expanded a global glut.
"Until there's some sign that either demand is stabilizing or supply growth is weakening there's going to be downward pressure on prices," said ANZ. "We could see it in the $30s."
Iron ore for immediate delivery to China's Tianjin Port stood at $42 a ton.
Chinese steel prices fell further on Thursday. The most-traded May rebar on the Shanghai Futures Exchange was down 0.8% at 1,644 yuan ($257) a ton.
Steel demand in China continued to fall this year after declining in 2014 for the first time in more than three decades, sinking steel prices to record lows, widening losses among producers and prompting many of them to cut output further or close.
But the unabated growth in iron ore supply, particularly among the lower cost suppliers in Australia and Brazil, has similarly pressured prices.
Following are prevailing iron ore prices in international markets:
Grade % Fe |
Origin |
Product |
load port |
destination |
Nov 27, 2015: cfr ($/ton) |
Nov 26, 2015: cfr ($/ton) |
Nov 25, 2015: cfr ($/ton) |
63.5/63 |
India |
Fines |
Vizag |
Qingdao |
44 |
44 |
44 |
62 |
India |
Fines |
FOB Vizag |
|
12 |
12 |
12 |
62 |
Australia |
PB |
Dampier |
Tianjin |
44 |
44 |
44 |
63.5 |
Brazil |
Fines |
Brazil |
China |
46 |
46 |
46 |
Source: Traders