Week 11 had an expected opening with the spot prices correcting by another 1% to 5% for various grades.
The sentiments were low with the domestic steel prices plummeting uninterrupted. With the collapse mills have stopped buying despite running low on stocks. Traders mostly possessed high cost products but most of the bids were for low priced loaded products. It is expected that traders would sell products at lower price if steel price continues to slide further thereby creating a negative speculation.
Although 5 Japanese steel majors have been affected by the Tsunami leading to production shut downs there is undercurrent of resilience in the Japanese Steel industry. The mills seem to be tightening their belts to resume production at a brisk pace to meet the reconstruction requirement.
As a precursor to this, it is learnt that a Japanese steel major has forayed into the ore market buying to stockpile iron ore before the prices start climbing. In fact in their fervor to stockpile they have diversified sourcing on the spot from untraditional sources.
However, China remained quiet on buying with prices receding in the aftermath of Tsunami. The stockpile at the Chinese ports still hovering above 80 million tonnes and mills grappling with surplus finished stocks it is unlikely that the trend will be reversed within a week.
Moreover a projected impact of only 3 million tonne on demand cut from Japan is miniscule when compared with a stock of 80 million tonnes at Chinese port. Hence the dampening effect will be restricted. At the same time domestic demand in China also on verge of picking up as season approaches and the 10 million housing and other infrastructure projects slated to commence in April it might just be time when the iron ore buying and prices sees reversal.
Iron ore fines
FOB India
| Grade | Change |
| Fe 63.5/63% | -1% |
| Fe 63.5/62.5% | -1% |
| Fe 63/62% | -1% |
| Fe 62/61% | -1% |
| Fe 61/60% | -1% |
| Fe 60/59 % | -1% |
| Fe 59/58 % | -2% |
| Fe 58/57% | -2% |
| Fe 57/56 % | -2% |
| Fe 56/55% | -2% |
| Fe 55/54 % | -3% |
| Fe 54/ 53 % | -4% |
| Fe 53/52 % | -4% |
| Fe 52/51 % | -5% |
Change is on Mar 18th as compared to 11th Mar 2011
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