Iron ore prices fell for three consecutive weeks, analysts expected to not finish falling
2014-01-27 17: 40: 25
Editor in charge: Catherine
(From this newspaper) As the price of iron ore dropped to its lowest level in six and a half months, the commodity has been weakened for three consecutive weeks. Given that Chinese steel mills are unwilling to replenish their inventories during the Spring Festival holiday, iron ore prices will fall further, and analysts have therefore revised down their expectations for iron ore prices.
Due to weaker steel demand in China, the number one consumer, the price of iron ore, a raw material for steelmaking, has plummeted by nearly 8% since the beginning of this year. China's steel futures fell to an all-time low earlier last week, and then rose for the second day in a row last Friday, but analysts and traders expect this rally may not continue.
Judy Zhu, an analyst at Standard Chartered Bank in Shanghai, pointed out: “Because the situation this year is different from the past five years, Chinese steel mills do not plan to restock before the Spring Festival holiday, so the price of iron ore will be further reduced 3- US$4. However, after the Spring Festival holiday, as steel mills gradually re-enter the market, the price of this commodity is expected to rebound."
The weakening of steel demand and the tightening of credit standards have prevented Chinese steel mills from increasing their iron ore inventories before this year's spring break (January 1 to February 31).
Previously, analysts at the Commonwealth Bank predicted that the price of iron ore may be between US$125-135 in the short term due to the Chinese New Year holiday. They also expect steel production to increase by about 5% this year, which is lower than the 8.5% increase last year.
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