Author: Paul Ploumis
07 Jan 2015 Last updated at 01:13:31 GMT
BEIJING (Scrap Monster): According to the latest report published by the China Iron and Steel Association (CISA), the iron ore prices are likely to fluctuate around current levels in the upcoming months. The market remains fundamentally oversupplied. At the same time, downstream steel demand continues to remain weak.
The CISA report states that the iron ore stocks at the Chinese ports as of end-December totaled 100.59 Mt, dropping by nearly 6% when compared with the previous month. However, the stocks continue to remain at higher levels when compared with a year ago. The port stocks ended 12% higher when compared with 2013.
Meanwhile CISA has decided to revise its iron ore price index by placing more weightage on actual transaction prices. The price index calculation will cover wider selection of iron ore products instead of just iron ore fines. Earlier, with effect from January, the Association had started publishing the iron ore index on a daily basis.
The average import price of iron ore dropped sharply by nearly one-third from $136.73/t in 2013 to $95.98/t in 2014. The domestic iron ore prices in the country too fell from Yuan 922.27 in 2013 to Yuan 764.58/t in 2014. The iron ore prices may see further softening in 2015 on the back of weakening demand and accelerating supplies.
The supply statistics during January to November indicate that Chinese market had persistent oversupply of iron ore. The imports as well as domestic production recorded significant growth during 2014. The iron ore imports by the country jumped higher by 13.4% year-on-year in 2014. The domestic iron ore production too has increased by nearly 5% during the year.