Iron ore prices make some gains towards the end of week with uptick in sea-borne demand: KATM Exclusive

16 October 2017

Iron ore in Asia shrugged off the drops in prices seen earlier the week, as some of the optimism over Chinese steel production and demand faded with more mill closures being reported in China. Benchmark spot price reported by Metal Bulletin for iron ore of 62% Fe content in Qingdao climbed 4.1% to $62.53 per tonne on Friday.

China’s increased imports

As per the recent Chinese customs data, the iron ore imports climbed 7.1% to 817 million tonnes, indicating the cumulative imports to top 1 billion tonnes, comfortably. On the monthly basis, iron ore imports reached 102.8 million tonnes in September from 93 million tonnes a year ago, surpassing the previous record of 96.3 million tonnes in December 2015.

Increased imports clearly point towards China’s concerted push to clean up the environment which lead to the increased demand for higher grade iron ore from sea-borne market.

This was also evident from the last week’s data of iron ore shipments to China released by Australia’s Port Hedland terminal, which indicated that the exports to China rose 2.8% to 36.7 million tonnes in September from 35.7 million tonnes in August.

India steel mills seeks cut in iron ore prices

In India, the domestic steelmakers are seeking some relief in form of reduction in the iron ore prices, as per an independent report. Earlier in the month, major miner, NMDC Ltd. cut its benchmark iron ore prices by INR 100 per tonne across both segments, lumps and fines, for October deliveries. However, the steelmakers insisted that this price cut could be more as the global prices have fallen much more in the past few months.

Furthermore, NMDC produced 15.65 million tonnes iron ore in the April- September period of the current fiscal. Largest iron ore miner in the country produced 9.74 million tonnes iron ore from its mines in Chhattisgarh and 5.91 million tonnes from the mines in Karnataka. The company sold 17.61 million tonnes iron ore during the said period