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Iron ore spot prices have dropped to new lows in the week ending Friday March 20.
The Metal Bulletin iron ore index for $62 Fe material finished the week at $54.66 per tonne cfr Qingdao, down by $4.24 per tonne from Monday.
The low price has seen European steelmakers turn to the spot market to buy up bargain cargoes.
Australia’s Department of Industry has lowered its forecast average price for iron ore in 2015 to $60 per tonne fob Australia, according to the department’s resources and energy quarterly report.
New, tougher environmental regulations imposed by Beijing could see many smaller steel mills facing closure, which would hit an already shaky raw materials market, according to delegates at an iron ore conference in Qingdao.
The number of lossmaking operations in China’s iron ore mining industry has increased dramatically since last year, and now accounts for 75% of domestic capacity, according to the Metallurgical Mines’ Assn of China.
The global commodities market will only see a recovery when major producers make output cuts, according to an executive at China International Capital Corp (CICC).
The difference between CIS export prices for billet and rebar, which market sources said was usually about $60 per tonne, has narrowed to an average of $20 per tonne.
The gap was last this narrow in late 2010.
In our weekly Steel First Outlook column, our colleagues at Metal Bulletin Research (MBR) looked at the prospects for flat steel prices in the US domestic market over the coming months.
It has been largely gloomy week for the automotive sector.
US carmaker General Motors (GM) announced that it is planning to idle its automotive manufacturing plant in the Russian city of St Petersburg this year.
Indonesia’s automobile production fell by 5.6% in January 2015 compared to the corresponding month in 2014, making it the third consecutive monthly drop on a year-on-year basis, according to data published by the Indonesian Automotive Industry Assn (Gaikindo).
Automobile production in South Korea dipped 12% year-on-year in February on weak exports and fewer working days in the month, the Korea Automobile Manufacturers Assn (Kama) announced.
Meanwhile, new passenger car sales in the European Union grew by 7.3% in February 2015 – the 18th consecutive monthly increase, according to the European Automobile Manufacturers Assn (ACEA).
Borsa Istanbul, Brazil energy rationing, Eurofer lobby, China shipbuilding
Elsewhere, Turkish stock exchange Borsa Istanbul has signed a partnership agreement with the London Metal Exchange and its parent company Hong Kong Exchanges & Clearing (HKEx) on the dissemination of market data.
Borsa Istanbul will also acquire the LME’s stake in clearing house LCH.Clearnet.
Steelmakers in Brazil may face again in 2015 the energy supply constraints that affected the country 14 years ago.
In Europe, the European steel association Eurofer is lobbying the European Commission to halve the time it takes to impose provisional measures on imports, the assn’s president Robrecht Himpe told Steel First.
And finally, after years of cuts to reduce overcapacity, China’s shipbuilding industry has successfully raised the rate of market concentration.
Editor Vera Blei looks at the main news covered by Steel First over the past week.