Global iron ore prices continue to edge lower
Prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port closed last week with a decline, while they have started the current week at $80.8-81.2/mt CFR China, down a further $4/mt compared to last Friday, March 24. As of March 20, inventory of iron ore at 33 major Chinese ports amounted to 118.3 million mt, up 1.13 million mt or 0.96 percent compared to the inventory level recorded on March 13, as announced by China’s Xinhua News Agency.
Although import iron ore purchases in China have been stepped up during the past week, inventories at Chinese ports have also continued to move up, putting pressure on iron ore prices. As a result, iron ore prices have declined by two percent over the past week.
In the current week, global iron ore prices have continued to edge down amid high inventories at Chinese ports as well as due to the high finished steel inventories in the local Chinese market and the decline in the steel futures markets at the start of the week. Market sources state that high inventories have put pressure on buyers, causing uncertainties in the market which have led to downward movement in the futures markets and in finished and semi-finished steel prices. Although demand for finished steel in China is expected to indicate a seasonal rise in the coming period, the pressure on global iron ore quotations is foreseen to continue as the high inventories at Chinese ports are not expected to be digested in the short term.
International investment bank Barclays Capital reports that there is still a downward risk in iron ore prices, while the bank states their forecast for iron ore quotations – which are currently at $80/mt – is that they will edge down to an average of $70/mt in the second quarter.