Iron ore down $1 on week closing

Exclusive

06 March 2017

Spot iron ore prices slipped by $1 per tonne on Friday to close at $91.50 per tonne. Fundamentally iron ore is not supported by any major reasons for rise and earlier this month the commodity picked up pace only because of some willingness shown by banks to support the mills. It was expected that the strong excess capacity controlling measures shall be put in place by China cutting down enough capacities and giving room to the steel prices to rise but all this is likely to be a long term plan.

Currently, Chinese steel has lost pace and domestic sales have also slowed down within the country. Chinese traders are also unwillingly offering discounts to foreign buyers to cut down their inventories. At the same time, the futures trading is under scanner for giving undue support to sport markets. Mills are cutting their inventories as well so that production can be rammed up post winters. All doesn’t seem to go the China way and as a result iron ore prices went down on Friday evening.

The roller coaster ride in Chinese iron ore and steel will continue for some more time as demand is very fragile and miners are not leaving any opportunity to hike their prices in line with steel. It has become a very neutral market in China with either buyers or sellers unwilling to take any position. Bearish sentiment is prevailing on both ends.

Steel prices across China have remained unchanged with HRC export offers from China at $515-520 per tonne and rebar at $445-450 per tonne export basis FOB.