Global iron ore prices plunge on weak demand: Emkay
Emkay Global Financial Services has come out with its report on metals sector. According to the research firm, price of steel across the geographies continued to fall during the last fortnight (ending 15th March) as restocking slows and also on renewed concerns of weak demand.
March 19, 2013 / 14:20 IST
Emkay Global Financial Services has come out with its report on metals sector. According to the research firm, price of steel across the geographies continued to fall during the last fortnight (ending 15th March) as restocking slows and also on renewed concerns of weak demand.
Iron ore prices meanwhile fell sharply on concerns lower Chinese demand and better supply outlook. Believe weakness in steel and iron ore prices to continue in the short- medium term. Base metals prices more or less remained flat except zinc. While, buying by China SRB is likely to provide some help to aluminium and zinc prices, rise in copper inventory seems to be a concern…Ferrous: weakness continues in steel; iron ore prices plungeSteel prices declined across different markets. The CIS Black Sea (fob) export HRC prices declined 1.7 percent to US$580/ tonne. Domestic prices in China also fell by 2.5 percent to US$642/tonne. In India, prices were broadly stable, as demand remains weakIron ore prices fell sharply during the fortnight with 62 percent and 58 percent Fe grade ore falling by 12.4 percent and 10 percent to US$132.9/tonne and US$127.2/tonne respectively on better supply outlook by the miners and concerns that Chinese demand would weakenNon-ferrous: prices remain broadly flatBase metal prices declined marginally during the fortnight except zinc which declined 5 percent. USD index also rose ~1 percent to 82.5 putting pressure on the pricesWhile zinc declined by 5 percent to close at US$1954/tonne, copper, aluminium and lead declined 1 percent, 1 percent and 2 percent to close at US$7762/tonne, US$1738/tonne and US$2235/tonne respectively. Inventories remained stable except for copper which rose 17 percent to 0.52 mt and lead which declined 3 percent to 0.28 mtMacroeconomics: uncertainty prevails
Concerns on renewed weakness in macro data prevailed, as manufacturing PMI that showed some improvement in the recent past started contracting again in most of the geographies except in US. Industrial production also fell sharply in China to 9.9 percent along with some developed countries including Euro zone, UK and Japan. In India however IIP improved for January to 2.4 percent. Indian WPI on the other hand rose to 6.84 percent, however core inflation remained lower indicating possible rate cut by the RBI. Believe, global economic health still remains uncertain to provide any clarity on demand recovery.Trend: Ferrous metalsContinuing the trend from the previous fortnight, global steel prices declined during the fortnight. While the China HR Sheet price declined by 2.5 percent to US$642/tonne (till Mar 11th), the benchmark CIS Black Sea (fob) Export prices declined 1.7 percent to end at US$580/tonne. In India though there have been talks of price hikes but slowing demand has been putting pressure consistently. Closure of sponge iron units in eastern and northern part of the country has been helping long product prices over flat prices.Raw material (iron ore) prices on the other hand remained very weak during the fortnight as the 62 percent and 58 percent grades of iron ore declined sharply by 12.4 percent and 10 percent to US$132.9/tonne and US$127.2/tonne respectively. The China domestic coking coal prices too declined 8.6 percent to close at US$254/tonne. Believe, this was due to renewed concerns on Chinese demand and better supply outlook.Trend: Non-ferrous metalsDuring the last fortnight, all metal prices saw marginal declines in LME prices except for zinc which declined sharply by 5 percent to US$1954/tonne. Copper aluminium and lead declined 1 percent, 1 percent and 2 percent to close at US$7762/tonne, US$1738/tonne and US$2235/tonne respectively. Inventory trend remained fairly same. Aluminium inventory remained stable at 5.1 mt, zinc inventory rose 1 percent to 1.2 mt and lead inventory declined 3 percent to 0.28 mt. Copper LME inventory however continued to rise with a gain of 17 percent to 0.52 mt during the past fortnight.Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.To read the full report click on the attachment 
Read More
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
