Iron ore is likely to hover around $80 a ton in the long term amid limited growth in Chinese steel output, an industry association official said on Monday, discounting any sharp recovery in prices as a supply glut weighs on the market.
Reuters reported that China would produce about 800 million tons of crude steel a year for the next decade, said Li Xinchuang, deputy secretary general of the China Iron and Steel Association, capping the country’s demand for raw material iron ore.
“The steel market in China will stabilise at a high level. That means it will give a stable market. But according to my understanding, Chinese production cannot go over 900 million tonnes,” Li told a mining conference in Melbourne.
China produced a record 779 million tons of crude steel in 2013, up 7.5 percent from the previous year.
Iron ore prices have fallen nearly 40 percent this year.
The day’s biggest mover was Chinese HRC, dropping 0.3 percent to settle at CNY 3,030 ($493.49) per metric ton on Friday, September 19. The price of Chinese coking coal held steady at CNY 1,390 ($226.38) per metric ton. For the fifth consecutive day, the price of Chinese slab held flat at CNY 3,480 ($566.78) per metric ton. The price of iron ore 58% fines from India hit a high price of CNY 840.00 ($136.81) and a low price of CNY 830.00 ($135.18) per dry metric ton.
The cash price of steel billet saw essentially no change on the LME for the fifth day in a row, remaining around $450.00 per metric ton. The 3-month price of steel billet remained essentially flat at $455.00 per metric ton on the LME.
The 3-month price of the US HRC futures contract remained essentially flat at $642.00 per short ton. The US HRC futures contract spot price held steady last Friday, remaining around $655.00 per short ton.