India Steel Market Watch
December 24: Spot iron ore prices firmed marginally, supported by a short-term tightening of supplies at China, although a bearish outlook kept gains in check, industry sources said.
A global glut and shrinking Chinese steel demand have pummelled iron ore prices, with the spot rate down 44% this year.
The slight recovery in prices was likely due to the year-end tightening of supplies as steel companies cut production, sources said.
Stocks of rebar, a steel product used in construction, stood at 3.647 million tons at 28 major cities in China on December 18, down 0.8% from the previous week, according to data tracked by industry analysts.
However, China's steel demand continued to shrink this year after falling in 2014 for the first time in more than three decades, further tightening cash flow among producers and limiting their access to bank loans.
Traders do not expect any significant restocking ahead of Chinese New Year in February.
Slashing China's excess steel capacity will be a top priority for the government over the next five years and Beijing is looking at establishing a fund linked to this target, sources said.
More than 50 million tons of steel capacity have shut in China this year, including both state-owned and private steelmakers, according to analysts.
Iron ore for immediate delivery to China's Tianjin port stood at $40 a ton.
Grade % Fe |
Origin |
Product |
load port |
destination |
Dec 24, 2015: cfr ($/ton) |
Dec 23, 2015: cfr ($/ton) |
Dec 22, 2015: cfr ($/ton) |
63.5/63 |
India |
Fines |
Vizag |
Qingdao |
40 |
40 |
40 |
62 |
India |
Fines |
FOB Vizag |
|
10 |
10 |
10 |
62 |
Australia |
PB |
Dampier |
Tianjin |
40 |
40 |
40 |
63.5 |
Brazil |
Fines |
Brazil |
China |
42 |
42 |
42 |
Source: Traders