Iron Ore Spot Prices Softening
One of Steel Market Update sources in Asia is an ore supplier to the Chinese steel mills. We share information about the ore markets as those who do business with China know not all is as it seems some times. Both The Steel Index and Platts are reporting a continuation of falling iron ore prices this week.
Platts reported out of their London office, sellers of iron ore to China were “scant” on Thursday as “traders are reluctant to take positions because Chinese steel mills are still showing resistance to purchasing raw materials from the spot market…while some distressed cargoes were offered at lower prices.”
Platts iron ore price assessment for 62% Fe fines dropped $1 to $180/dry metric ton.
The Steel Index (TSI) has 62% Fe fines even lower at $176.6/dry metric ton and is reporting ore prices as having dropped by $9.00/dmt over the past 4 weeks or 4.8%.
Our source in Asia told us this morning:
“The market is starting to get soft (really) now.. The levels I gave you previously which are correct are starting to be hammered as well, but they have not dropped yet.. Maybe next week we will see some lower levels and I will advise you…”
Earlier this week our source told us the levels of iron ore sitting at the ports in China had risen from 70 million to 100 million metric tons. As he explained, “The reason is the mills and importers are not taking the cargo out of the ports.”
This week the government of India raised the export tax on iron ore from 5% to 20% (no increase on pellets). Our source reported what has been happening in the Chinese ore market since:
“Indians see the Export Tax coming and have started running wild to export before this takes effect and you know what that means..... 5-10 lots being offered everyday brings the Sharks to the Blood... (lower prices)... Chinese are welcoming the in flood of offers which are being negotiated downwards to the limit...Does not make my life easier with this Indian mess now... I cannot keep my ore prices stable now... We are considering withdrawing until the Indians run out of steam and prices stabilize.”
Steel Market Update continues to watch the iron ore, coking coal (where there was settlement with the Japanese mills for 2nd Quarter by Anglo American), scrap and other materials and issues which impact steel prices. We have much more detailed reports and analysis in our Steel Market Update newsletter which is published three times per week for our members and trial members. You can become a trial member (free) by clicking on the button below and registering.
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