Help Desk -
9958816305, 9810335381
Email
Password

Cracks widen in the iron ore prices on expected line

Mining News - Published on Fri, 01 May 2015

Image Source: nationalgeographic.com
On expected lines, iron ore price continued retracting on Thursday, adding to steep losses on Wednesday, owing to the core fundamentals of demand supply imbalance finally taking over the transitory blip generated by BHPB announcement in April. Iron ore prices have been declining since Wednesday after 27% rally during the past 4 weeks. The decline is unlikely to reverse after the long weekend as China remains close on Friday unless the speculators come back with a renewed vigor on Monday armed by the news of Vale substituting production

The most traded September iron ore contract on the Dalian Commodity Exchange closed down 2.1 percent at CNY 413.5 a tonne after falling as low as CNY 406.5. The Steel Index for iron ore for immediate delivery to China's Tianjin port also softened by 1.2%to USD 56.2 a tonne. Thus the rout in last 2 days has deepened with DCE futures going down by 3.7% from last high of CNY 429 on Tuesday and TSI slipping by 6.5% from last high of USD 59.8 also on Tuesday

In unison, prices of various types of iron ore products ie fine, lumps, sinter feed, concentrate and pellets from various origins on physical market posted losses of USD 1-3 per tonne on Wednesday

Iron ore levels declined in maiden turn of fortunes in the last 3 weeks. After 27% rally in April from the decade low of USD 46.50 per tonne on 2nd April it was long way covered within span of 3 weeks. Crackles of the fireworks were heard in the four corners of Chinese steel mills having stepped up buying.

But the crack in the rally was inevitable since the demand fundamentals in the finished steel market remained unaltered throughout in China thereby obviating the need for prolonged buying. The recent rally was always mystifying since the demand supply balance in the ore market had not changed hence the reality was to catch up sooner rather than later.

Vale SA said on Thursday it expects to replace some old higher-cost iron ore production as new capacity comes on stream, the clearest sign yet the miner could cut future output forecasts due to weak prices.

Today being holiday on account of May Day celebration followed by weekend the trend will become only next week on Monday whether the decrepit portends to be widespread.

Source :

Posted By : SteelGuru Admin on Fri, 01 May 2015
Related News from Mining segment