August 09, 2008

Chinese domestic iron ore prices decline in April

According to the inspection of the Ministry of Commerce of China, because the growth rate of spot iron ore price in domestic marker was high before and the profit in iron ore mine exploitation increased, which boosted rapid rise of iron ore supply, domestic iron pre price declined in April 2008.

The average iron ore price in April in China was CNY 1,487.5 per tonne down by 4.95% MoM. In Tangshan, the EXW price of 66% fine ore was CNY 1,480 per tonne in April 2008 down by CNY 97 per tonne than the price in March 2008.

The Ministry of Commerce of China analyzed that on the one hand, iron ore supply increased and domestic iron ore output climbed up rapidly as well, so tight supply has been released in domestic market. Looking at data, crude iron ore output in China in Q1 was 168 million tonnes, up by 25.1% YoY. Meanwhile, iron ore import volume to China was as high as 111 million tonnes in Q1, up by 10.5% YoY.

On the other hand, Chinese steel output decreased, so the demand for iron ore was depressed. Due to slowing down economy increase, the growth rate of domestic crude steel output declined from the peak. China’s cumulative crude steel output in Q1 rose up by 8.6% YoY, down by 13.7 percentage points than the same period in last year. The growth rate was also slower than the increasing speed of iron ore supply.

(Sourced from Mysteel.net)