Iron ore inventories at 25 major Chinese sea ports stood at 99.37Mt at August 20, up 780kt or 0.79% from the week earlier, according to the Xinhua-China Iron Ore Price Index (Xinhua-China IOP Index).
The price index for iron ore imports of 63.5% Fe content fell 4 points week on week to 117 by August 20 and that for iron ore imports of 58% Fe content also fell 4 points week on week to 98.
Previously, the China Iron Ore Price Index (CIOPI) for the August 6-10 period fell 5.95% from the week earlier to 416.17, according to the China Iron and Steel Association (CISA).
During the period, China’s domestic iron ore prices averaged RMB 910.20/t, ($142.86) up 0.80% from the previous week, while imported iron ore CIF (cost, insurance and freight) fell 8.58% in the week to average US$121.61/t, or RMB 902.75/t (tax included). The iron ore price will continue a downward trend and was likely to approach US$110/t, a Xinhua analysts said.
After falling over a narrow range for two weeks, the price decline of imported iron ore accelerated in the week ending August 20. Meanwhile, shipments continued to increase, but market trading was thin as many steel mills and ore traders chose to take a wait-and-see attitude.
The China Iron Ore Spot Trading Platform reported zero trading in the August 13-17 period, reflecting that steel mills and ore traders are bearish on a falling trajectory of the iron ore price
India, Australia and Brazil were the main sources of iron ore exported to China and the iron ore imports from the three countries saw a combined growth of 600kt in the previous week.
As a result of the high export duty imposed by the Indian government, iron ore exports to China from India’s eastern state of Odisha, the largest iron-ore producing state in the country, dipped by 46% in FY2011-12 to 12.96Mt as against 24.12Mt a year earlier. China is the single biggest market for iron ore exports from India, but due to the 30% duty now imposed exports from across India have dropped by nearly 40% to 60Mt in FY2011-12 from 98Mt in the previous year.
This steep export duty imposed by the Indian central government has rendered Indian ore uncompetitive in the export market, especially to China where shipments plummeted from 89.72Mt in 2010-11 to 52.47Mt in 2011-12 (to February 2012).
China bought 15% of its iron ore from India in 2010-11, but was now considering alternative supplies following the hike in export duty.
Source: China Metals e-mail email@example.com