Chinese steel companies report overall loss in first ten months

Iron ore’s price collapse will extend into the $20 a metric ton range by 2017 or even sooner as a surplus in the export market continues to grow, according to Axiom Capital Management Inc.

As a result of the subdued pricing environment, several high-cost iron ore miners have been forced to scale back production. Again, I think it’s the miners that are over-optimistic concerning iron ore demand. US steelmakers have filed petitions with USA trade authorities for the imposition of antidumping duties on steel imports from a number of countries, including China.

Oversupply in Chinese housing a major negative catalyst. The outlook for China’s steel demand is subdued, he said.

Taking into account other demand trends in commodities, and the propensity for China to be more optimistic than actual market conditions, I believe the numbers from China, in this case, are the ones to base decisions on.

Consumption of steel products is expected to drop to 648 million tonnes in 2016, also down 3 percent from 2015. Chinese steel exports rose 27% year-over-year in the first nine months of 2015.

Steel product exports slid 1.1 percent to 9.61 million tons in November from a year ago, but total exports for the first eleven months jumped 21.7 percent to 101.7 million tons from a year ago. Equipment with higher iron and steel consumption per ton will see more output declines next year, it said. In China, over supply in the property sector, reduced the demand for steel products.

Around 18 million unsold apartments in China have created a glut in the economy, according to the China Academy of Social Sciences.

Country’s iron ore exports stood at 10.75 lakh tonnes in the April-October period of this fiscal, Parliament was informed today.

AUSTRALIA’S biggest export commodity slumped below the key psychological barrier to $US39.06 per tonne overnight as steel demand in China continues to weaken.

Another factor has been the decision by the large producers to maintain production levels, partially to put pressure on smaller competitors, and also to lower costs per ton. The mine is a significant new participant that will need to find a home for its production, although markets have been aware that Roy Hill’s supply is coming for many months now, he said. “It could happen sooner than our forecast of 2017, that wouldn’t shock us”.