Since the decline demand for iron ore in China, the import prices for iron ore with 62% purity has fell to $48.6 /ton. Singapore Commodity Trading Fund predicted that due to the Chinese steel overcapacity, the demand for iron ore is also declining. The importing price for iron ore may drop further to $40/ton which will close to the lowest price $34/ton in 2014.
The market situation for Iranian iron ore is very difficult. According to the statement from Iranian iron ore production and export association officials Deh Rani ( Keyvan Jafari Tehrani) The only way to get through this difficulty is to reduce the production and transportation costs. He warned that the decline in demand for iron ore in China, and Chinese steel overcapacity is not the only market thread. He added, The steel production in China in 2015 was 811 million tons, and the production quantity will reduce to 745 million tons in 2018. Every year, the Chinese steel manufacturer exported at least 80 million tons of steel. We can predict that although Chinese steel production quantity has fell, the demand for Iranian iron ore in the Chinese market is still there.
In Chine, the manufacturer is trying to cut steel production cost which means most of steel manufacturers will use a cheaper 55% purity iron ore. And this is the right quality that Iranian iron ore producer could offer. Deh Rani said: " The transportation cost for iron ore from Brazil and Australia is about $5/ton, but the transportation cost for the Iranian iron ore is about $10/ton. In 2014, Iran has exported 22 million tons of iron ore which is the world's minth largest exporter of iron ore. In 2015, Iranian iron ore exports are unlikely to over 15 million tons.
