Research

Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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June 2014 | Steel Raw Materials


Lenders cut credit lines in the wake of Qingdao: Iron Ore Highlights


Lenders have become far more cautious about issuing loans on iron ore after Qingdao.

Access to credit was restricted last week following the investigation into the fraudulent use of warehouse receipts at a Qingdao port. Banks have effectively become far more cautious about issuing loans on iron ore, which in turn is reducing buying capacity among consumers. Though China’s customs authorities are expected to tighten the rules on these lending practices by early July, it will likely take a lot longer for confidence to be restored.

The scarcity of credit, combined with high port stocks and limp end-user demand, has pushed the market lower. On a week-on-week basis, the index price for spot ore delivered to China (normalized to Qingdao/62% Fe) tumbled by 3.9% to...

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