India Steel Market Watch
October 8: Spot iron ore offers in China remained unchanged with steel mills looking to replenish inventories of the raw material after a week-long National Day break, industry sources said.
However, gains could be short-lived, traders and analysts warned, as a weak steel market forces producers to curb production, cutting demand for iron ore.
Because everybody's back from the holidays, there could be some mills which need to replenish their inventory levels. So, iron ore prices could see some gains this week and the next, sources said.
But soft Chinese steel prices, dragged down by continuously weak demand in the world's top consumer, could cut short an iron ore rally.
There has been no pick-up in steel demand this month, usually a seasonally brisk period, traders said, blaming a slowdown in the overall economy. "I think the trend would continue for the rest of the year," he said.
The 62% grade ore benchmark stood at $55 a ton.
A slowdown in China's steel production will dampen iron ore demand, while oversupply of the steel-making commodity will worsen next year, analysts said.
China's iron ore production reduction will not offset the production increase from overseas top producers and analysts see prices dropping to $50 a ton next year from an estimated $58 this year.
Following are iron ore offers in the international market:
Grade % Fe |
Origin |
Product |
load port |
destination |
Oct 8, 2015: cfr ($/ton) |
Oct 7, 2015: cfr ($/ton) |
Oct 6, 2015: cfr ($/ton) |
63.5/63 |
India |
Fines |
Vizag |
Qingdao |
55 |
55 |
55 |
62 |
India |
Fines |
FOB Vizag |
|
23 |
23 |
23 |
62 |
Australia |
PB |
Dampier |
Tianjin |
55 |
55 |
55 |
63.5 |
Brazil |
Fines |
Brazil |
China |
57 |
57 |
57 |
Source: Traders