Global iron ore prices start the week with a downward movement
Having recorded a weekly increase during the past week, prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port have decreased by $1.4/mt on Monday, January 15, compared to last Friday, starting the current week at $76.27-76.92/mt CFR China. Meanwhile, as of January 12, stockpiles of imported iron ore at Chinese ports reached 152.8 million mt, up two million mt week on week.
On Thursday, January 11, Australia’s Port Hedland, which is country’s major port for iron ore shipments, was closed at 6:30 p.m. as Cyclone Joyce was expected to hit the northeastern coasts of the country. After the cyclone eased, the port resumed its operations at 1:30 p.m. on January 13. The cyclone did not impact global iron ore prices positively as it was short-lived and since iron ore stocks at Chinese ports are on the high side. On the contrary, the high levels of iron ore inventories at Chinese ports have exerted downward pressure on iron ore prices, which softened on the last day of last week, closing the week at $78/mt CFR. Meanwhile, last week iron ore prices in the Chinese futures market declined by two percent as compared to the previous week. Despite the declines seen on the last day of the week, global iron ore prices in the spot market increased by a net margin of 0.39 percent in the course of last week.
According to market sources, global iron ore prices will likely move downwards in the coming days, since trading activity in the import iron ore market in China has slowed down amid harsh winter conditions and increased inventories of iron ore at Chinese ports. Since iron ore inventories at Chinese ports have reached record-high levels, despite the ongoing production cuts at Chinese mills within the scope of environmental measures, Chinese mills will likely avoid concluding bookings to replenish their iron ore stocks and this situation is expected to exert downward pressure on global iron ore prices.
*This was published on SteelOrbis website on January 15, 2017.