Rising 4.7 percent, the Chinese low price of 62% Australian iron ore fines saw the largest increase on the weekly Construction MMI® this week.
However, the iron ore complex could potentially see dropping prices, as Citigroup’s research arm reported that seaborne iron ore supply is set to grow 15 percent in the current half of this year, according to a Mineweb article.
Citi estimates that iron ore supply will hit 470 million metric tons before 2012 is out. The concern is that “ore demand is slowing in China, the leading importer and steelmaker.” The article went on to cite that “‘the million-dollar question'” is whether mining companies in the Asian nation will reduce output to balance the market, according to Citi Research.”
Citigroup did not change its iron ore price forecast, however.
Citgroup forecasts the iron ore price to remain at $125 a ton this year and $120 for 2013. “Its estimated supply-demand balance implies a 7.2 million-ton global surplus in 2012, the first in at least five years, rising to 20.7 million tons in 2013,” according to the article.
Back to the Weekly Construction Metal Price Index
Chinese H-beam steel rose 2.9 percent over the past week. Chinese rebar finished the week with a 2.6 percent increase.
After a 0.5 percent decline, US shredded scrap closed out the week below $400 per short ton. In the US construction market, US Census Bureau figures for new residential home sales came out today, showing a 0.3 percent decrease from the revised July rate of 374,000; it is, however, 27.7 percent above the August 2011 number.
Chinese aluminum bar remained unchanged for the week. Prices for European 1050 aluminum remained constant.
The weekly US Gulf Coast bar fuel surcharge closed last week with a 2.2 percent drop. The weekly US Midwest bar fuel surcharge fell 1.2 percent after rising 0.2 percent the week before. Following a 0.5 percent increase in the week prior, the weekly US Rocky Mountain bar fuel surcharge fell 0.9 percent last week.
The Construction MMI® collects and weights 9 metal price points used within the construction industry to provide a unique view into construction industry price trends. For more information on the Construction MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.