Lower steel mill rates in China could pressure iron ore prices: CISA
Posting Date:[2015-11-25]
Chinese steel mills with cash flow tightness may be forced to cut or halt steel production in November-December, which will pressure iron ore prices, the China Iron & Steel Association said.
Iron ore prices have softened in the past few weeks.
Platts assessed the 62% Fe Iron Ore Index at $44.75/dry mt CFR North China Monday, down 55 cents from Friday and approaching the historical low of $44.50/dmt CFR set on July 8.
Blast furnace operating rates have slipped modestly since October, though less than some market observers expected, CISA said.
Over January-October, China’s steel output fell 2.2% year on year to 675 million mt, while October output was down 3.1% year on year at 66 million mt.
China’s appetite for iron ore shrank in October due to lower steel output, CISA data showed.
Traders and steel mills registered Australian iron ore imports of 55.3 million mt in October, down 24.8% month on month, while registered imports from Brazil rose 20.3% month on month to 21.8 million mt.
Chinese buyers preferred iron ore with at least 66% ferrous content in October, likely because of high stocks of the medium and lower grades held by domestic miners and at Chinese ports.
China received 49.4 million mt of Australian iron ore in October, down 30.5% month on month, while tonnage for fines with at least 66% ferrous content rose 28.6% to 401,600 mt.
The country received 17.8 million mt of iron ore from Brazil in October, down 2.5% month on month, while higher ferrous supply surged 72.2% from September to 1.02 million mt.
Despite the October decline, China’s iron ore imports over January-October shrank a marginal 0.5% year on year to 774.5 million mt.
