India Steel Market Watch
December 17: Spot iron ore prices edged up marginally after a recent rout that pummelled prices to record lows, but the bearish sentiment still persists with Goldman Sachs cutting its price forecasts and warning that more mine closures are needed.
The steel-making commodity has dropped 46% this year, outpacing copper and crude oil, amidst a global glut and shrinking steel demand in the top market of China.
Some iron ore cargoes were sold to China at slightly higher prices compared to last week's spot levels, traders said, although private offers remained low in a bid to draw buyers.
Some Chinese mills that have been liquidating iron ore inventory may have pulled back and the reduction in short-term supply may have helped prop up prices, said ANZ.
Miners need to cut about 250 million tons of iron ore capacity, or 18% of current supplies, over the next three years, to balance the market, Goldman Sachs said as it lowered its price forecasts further.
Goldman slashed its price estimate for 2016 by 13 percent to $38 per ton. Iron ore will average $35 per ton in 2017 and 2018, down 14% from earlier forecasts.
"We expect the pace of mine closures to accelerate in 2016 as producers with negative cash flow struggle to find alternative sources of funding," the analysts said.
Benchmark 62% grade iron ore for delivery to China's Tianjin Port stood at $38 a ton. It touched $37, the weakest level recorded still now.
Following are international iron ore prices:
Grade % Fe |
Origin |
Product |
load port |
destination |
Dec 17, 2015: cfr ($/ton) |
Dec 16, 2015: cfr ($/ton) |
Dec 15, 2015: cfr ($/ton) |
63.5/63 |
India |
Fines |
Vizag |
Qingdao |
38 |
38 |
38 |
62 |
India |
Fines |
FOB Vizag |
|
8 |
8 |
8 |
62 |
Australia |
PB |
Dampier |
Tianjin |
38 |
38 |
38 |
63.5 |
Brazil |
Fines |
Brazil |
China |
40 |
40 |
40 |