CRU: Iron Ore Prices Declining as Seaborne Supply Improves

In China, blast furnaces continue to increase production and they are doing so with limited iron ore availability at both mills and ports. Margins are still weak as steel prices have continued to decline on strong supply from mills and destocking of elevated steel inventories. Iron ore demand in other markets remains weak and volumes continue to shift over to the Chinese market. In addition, domestic iron ore production continues to increase with warmer weather in the north and looser transportation restrictions.

It has been another strong weak for iron ore supply. Seaborne supply from the majors registered another impressive week as Rio Tinto had its best week of the year and shipments from Minas Gerais in southern Brazil are recovering after the heavy rain period. The only weak spots in the market were Roy Hill, which has not shipped a single tonne in the past week due to its quarterly maintenance, and South Africa, which continued to ship at a lower rate due to the country’s mining restrictions.

For the next week, there are mixed signals from the market. Inventories are low, but seaborne supply continues to improve. Our indicators below do not give a strong indication for direction in the coming week and the shorter work week in China leads us to expect a flat price development.

Request more information about this topic.

Learn more about CRU’s services at www.crugroup.com