Iron ore demand, low iron ore price

Concerns about excess supply in the iron ore market continued to linger. After several struggles, iron ore prices fell again by US$55/ton, setting a new six-year low.

The iron ore market accelerated and the spot transaction was light, and the market had a strong wait-and-see atmosphere. The short-term increase in the spot price of steel has not had a favorable effect on the iron ore market. However, the decline in crude steel production data has triggered concerns about the status quo in the steel industry. Affected by this, the fall in the price of iron ore ** drove the continuous decline in the prices of ports and forward spot prices, and the market’s bearish expectations grew stronger.

In the current situation of low crude steel production, poor demand has caused greater pressure on iron ore prices. At present, the mainstream long-term spot price of imported ores has fallen below US$55. Under the circumstances that the market is continuously under pressure, the downward pressure will be highlighted in the future.

The strict implementation of the “New Environmental Protection Law” will, to a large extent, curb the release of production capacity of domestic steel companies and raise the cost of environmental protection. In the long run, it will have a positive impact on the trend of steel prices. The increase in stocks of steel mills will, on the one hand, precipitate some of the funds and aggravate the difficulties in the liquidity of the steel industry. On the other hand, the increase in the pressure on the sales of steel spot resources will increase the inventory in the end-market of steel products without a significant increase in demand. The increase will increase the downward pressure on prices. It is expected that the short-term domestic steel price increase will slow down and it will be difficult to support the stoppage of the import ore price.