Lower China demand hits iron ore prices

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New Delhi, Nov 19 : With China, world’s largest importer of iron ore, unwilling to buy the mineral including those from India at higher rates, prices have come down to $185-190 per tonne from $190-195 per tonne. Chinese customers are reluctant to pay higher prices resulting in iron ore stocks at major seaports of that country rising to around 42 million tonne (MT), up from 40.4 MT in the middle of last month, according to a report.

“Some suppliers are starting to lower their offer prices, with those for 63.5% Fe Indian iron ore fines now down to $185-190 per tonne China from $ 190-195 in recent days,” the Steel Business Briefing (SBB) reports quoting Chinese traders.

At present, Chinese mills are more likely to consume their own iron ore reserves to maintain production, though these stocks are understood to be quite low. With small mills buckling under the weight of high raw materials costs and limiting their production, demand for imported ore has decreased to some extent, it pointed out. “Customs statistics indicate that China imported about 29.77 MT of iron ore in October, down from 33.24 MT in September. And in the first 10 months of this year, China imported about 313.75 MT,” it added.

The reduced demand from China would definitely make the domestic steel sector happy as the major utilities have been clamouring for conservation of iron ore. Even the steel ministry favoured conservation of the ore rather than exporting it, in view of the steel companies announcing major capacity expansion plans.