China’s Import Appetite For Iron Ore Remains Insatiable

In its inaugural Commodity Briefing Service (CBS) report on iron ore, S&P Global Market Intelligence examines the prevailing iron ore market conditions.

Seaborne imports of iron ore to China have remained strong, supporting prices for 62% Fe products. Imports rose 16% year on year in June 2017, to 94.4 million tonnes (Mt), with exports from Australia being a significant driver, at 63.4 Mt. This represented quite an impressive increase in exports during a month that typically sees some seasonal slowdown. The rise in prices - in spite of this increased supply - underscores the current strength in China's steelmaking market, with new record daily production rates being posted.

S&P Global Market Intelligence expects iron ore prices to remain at relatively elevated levels through Q3 2017, as Chinese steel making continues apace and the country's appetite for imports absorbs short-term increases in global ore production. The iron ore price has averaged US$66/dmt CFR in July so far, based on S&P Global Platts IODEX. There appears to be little to suggest significant near-term weakness for mid-to-high grade iron ores. We do, however, assess risks to be skewed to the downside. Hence, our Q3 average price expectation is slightly lower than prevailing levels, at US$63/t.

Gain insight into the current iron ore market trend, download the full Commodity Briefing Service: Iron Ore report.