Iron ore prices move down once again
After the sharp price declines recorded in the iron ore market for 62 percent Fe content iron ore delivered to China’s Qingdao port at the beginning of April, prices trended upwards starting in the third week of the month and increased, on April 28. The upward trend of iron ore prices came as a surprise to the global market as prices increased by around 27 percent over the fortnight. The main reasons of this upward movement were the rumors of financial incentive measures to be implemented by the Chinese government to boost the domestic economy and the announcement of Australian miner BHP Billiton, postponing of its port project aimed at increasing its annual production capacity.
On Wednesday, April 29, prices for 62 percent Fe content iron ore opened the current week at the same price level, while some market players believe their downward trend will continue in the coming days. However some other market players think import iron ore deals will accelerate in the coming period due to declining stock levels in Chinese ports, providing support for iron ore prices.
On the other hand, recent announcement of the China Iron and Steel Association (CISA) stated that Chinese iron and steel industry may take advantage of the infrastructure projects planned as a part of Chinese government’s “One Belt, One Road” strategy. However, in general it was underlined that very difficult days are ahead of the Chinese iron and steel sector in the short term. According to CISA data, medium and large scaled iron ore companies in China have lost 1.78 billion dollars in the first quarter of 2015. Additionally, CISA has called on government authorities to cut taxes further for local iron ore miners.