Since March 2014, prices of iron ore, coke and other raw materials decline more sharply than price of steel. Steel mills profit improved markedly.
With the downstream steel consumption gradually go into the peak season, steel mills are increasing the amount of production. Since April, the amount of steel has got rapid rebounded. In the middle of April, the average daily amount of crude steel hit a new record high of 2.28 million tons. Moreover, in late April, the average daily amount of crude steel of the major steel mill was close to 1.8 million tons. It is estimated that the average daily output of crude steel will exceed 2.3 million tons if taking this into account.
Although the increase of steel output means the increasing demands of iron ore, however, supply pressure of steel market also is ratcheted up so that it leads to slower the pace of "destocking". Spot steel
prices continue to go down, and raw materials such as iron ore have lost its reasons for rising in price.
International mining companies are expanding the amount of production one after another. Driven by the demands of financing and the declining price of international iron ore, the amount of imported iron ore is growing increasingly in China. China imported 83.39 million tons of iron ore in April, higher than 24.18% last month. After January, the amount of iron ore once again broke through 80 million tons. Despite the increasing in demand for iron ore, import growth exceeds the demand growth, and obviously iron ore inventories in port are rising, repeatedly getting new high record. Currently the amount of iron ore reaches more than 112 million tons.
At present, the amount of iron ore supply excesses, so most steel mills hold wait-and-see attitude. The turnover of the spot market in port continued to shrink, and some traders sold iron ore at a low price.
It was reported that as the international iron ore price indicator, platts iron ore price index dropped all the time, falling from 113 dollars per ton in April 24 to 103.25 dollars per ton in May 13. It is expected to continue to dip below 100 dollars per ton.