Iron ore prices begin the week with an increase following fresh developments in China
Prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port have moved up by $2.1/mt on Monday, August 7, compared to last Friday, starting the current week at $75.85-76.55/mt CFR China. As of July 31, inventory of iron ore at 33 major Chinese ports amounted to 120.77 million mt, down 930,000 mt or 0.76 percent compared to the inventory level recorded on July 17, as announced by China’s Xinhua News Agency.
Last week, steel and raw material prices in the Chinese futures market moved upwards amid the strong impact on the Chinese steel industry of the announcement of environmental inspections to ensure the full elimination of low-grade construction steel produced by induction furnaces. As a result, global iron ore prices increased by seven percent throughout the week.
With new production cuts for the coming winter season becoming the main topic in the Chinese steel industry last Friday, August 4, the Chinese futures markets have started this week with a sharp rise. Market sources state that the newly-announced production cuts are expected to impact coking coal prices in particular, with coking coal prices foreseen to increase sharply, while they are also sure that finished and semi-finished steel prices in China will rise in the short term. According to market players, even though iron ore prices are likely to record new increases based on the anticipated uptrend of steel prices, inventories of iron ore held by Chinese mills are on the high side, which may have a negative impact on iron pre prices – even though the mills’ capacity utilization rates are also at high levels at present.
*This was published on SteelOrbis website on August 7, 2017.