iron-ore-report_May 13.pdf
iron-ore-report_May 13.pdf
iron-ore-report_May 13.pdf
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Seaborne <strong>iron</strong> <strong>ore</strong> prices likely soft in June 2013<br />
‣ International <strong>iron</strong> <strong>ore</strong> prices are likely to move in a narrow range in June 2013, according to<br />
India Steel Market Watch (ISMW) poll of industry players.<br />
‣ Prices of <strong>iron</strong> <strong>ore</strong> of 62/63% Fe content are likely to be in the region of $125-130/ton cfr China in<br />
June 2013.<br />
‣ Prices of 58% Fe content <strong>iron</strong> <strong>ore</strong> may go down up to $111/ton cfr China in June 2013.<br />
Factors influencing seaborne price movement in June 2013<br />
‣ Stockpiles at ports in China stood at 70 million tons, a level considered as comfortable by<br />
Chinese steel mills.<br />
‣ There is growing concern that slowing economic growth in China, the world’s biggest buyer, will<br />
reduce demand as global supplies increase<br />
‣ China's April industrial output trailed estimates and fixed-asset investment slowed after<br />
economic growth unexpectedly contracted in the first quarter, data showed. Bank of America<br />
Corp. reduced its estimate on China's 2013 gross domestic product growth to 7.6% from 8%.<br />
Following are likely <strong>iron</strong> <strong>ore</strong> prices in international markets:<br />
Grade %<br />
Fe Origin Product load port Destination<br />
June 2013 prices<br />
cfr ($/ton)<br />
Current prices<br />
cfr ($/ton)<br />
63.5 India Fines Vizag Qingdao 128 130<br />
62 India Fines Vizag Qingdao 125 127<br />
61 India Fines Vizag Qingdao 122 124<br />
60 India Fines Vizag Qingdao 119 121<br />
59 India Fines Vizag Qingdao 117 118<br />
58 India Fines Vizag Qingdao 111 114<br />
Source: Traders, industry sources<br />
Likely scenario’s that may impact price movement<br />
Although market feedback points towards soft market scenario in June 2013, a cause-effect analysis<br />
would show the factors that may take prices down or up:<br />
Factors influencing soft international prices<br />
Cause<br />
Effect<br />
Stockpiles at ports rise over 70 million tons Chinese buyers will be cautious on purchases resulting softer prices<br />
Slowing economic growth in China<br />
This may reduce buying by steel mills resulting in soft prices<br />
Supplies from miners rise<br />
This may increase stockpile in ports resulting in bitter negotiation<br />
Factors influencing high international prices<br />
Cause<br />
Effect<br />
Port stock falls from 70 million tons in China Restocking will raise prices<br />
Economic growth rebounds<br />
<strong>May</strong> lead to higher rebar demand and <strong>ore</strong> demand<br />
Supplies from miners decline<br />
Increase in demand-supply gap to raise prices
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