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China: iron ore prices continue to retreat- 17 July 10

Iron ore prices continue to decrease in the Chinese market in the middle of July. While the prices were relatively stable in June due to uncertainty in the segment for finished products, the decreases in July prices for finished steel have completely discouraged iron ore suppliers. Moreover, after local producers slashed prices for the material, reductions in import iron ore offers became inevitable.

Thus, Indian concentrate is currently quoted at $128-130/t c&f, by $5-7/t lower than a week ago. At the same time, most market participants doubt the situation will improve in the near future and expect iron ore prices to fall further. However, such seasonal slumps are usually short-lived. Noteworthy, the most recent price plunge was observed about two weeks ago.
       
Demand from most steelmakers is low and iron ore inventories at Chinese ports are growing – buyers do not relieve pressure on stocks while new volumes under previously made contracts are coming. Thus, about 72.2 mt of the material are currently stockpiled at Chinese ports, which is by 1.85 mt more than at the beginning of this month. Thus, the amount of Australian material has increased by 0.8 mt, to 23.75 mt, Brazilian – by 0.57 mt, to 15.87 mt, Indian – by 0.28 mt, to 18.35 mt.

It is forecasted that the downward trend will persist till late July and the prices will roll back to $123-125/t c&f main ports of China. Then, the prices are expected to stabilize with slight fluctuations. Yet, this scenario is typical of the traditional summer slowdown but not of the second wave of crisis, of which some players in the market are so wary.

(Source: www.metalexpert-group.com )

Jul 17, 2010 08:24
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