Iron ore price to decline in March, MOC

Iron ore price will show weak performance in general in March as confidence of raw material market cannot restore rapidly, according to a report released Friday by the

Foreign Trade Department of China's Ministry of Commerce (MOC).
The report showed that China's iron ore imports reached 48.64 million metric tons (tonnes) in February, down 29.5 percent from the historical high in January, and down 1.5 percent year on year.
Iron ore price went up in early February, and eased afterwards. Iron ore price continued to decline in the first ten days of March.
High steel product price was the key factor behind the rising iron ore price in the first ten days of February. Plus, miners kept pushing up spot price of iron ore to secure a higher agreement price for the second quarter.
The iron ore price fell on the decline of steel product price in the last 20 days of February, and posted accelerated decline in the last ten days.
The report said that Japan's major steel plants, including the Nippon Steel Corporation, suffered serious destruction from the earthquake, and is unlikely to restore production in the short term, with production suspension likely to be around half a year, which will affect iron ore demand in international market.
The steel product market shows no signs of bottoming out, which exerting pressure on iron ore market.
With raw material market entering adjustment period, steel plants will show obvious wait-and-see attitude, which will dampen distributors' confidence.
Therefore, confidence of raw material market cannot restore rapidly in March, and iron ore market will go weak.
China's crude iron ore output kept declining in the first two months of this year due to impact of China's Spring Festival holiday and low temperature in winter, and the output set 11-month low since March 2010.
The reports held that China's crude iron ore output will gradually recover to normal level after March, and the output is expected to keep increasing.
With regard to inventory, total inventory of key ports reached 80.79 million tonnes by March 4. The port inventory is expected to decline slightly on the decline of iron ore imports and price in February.