Prices of ex-Australia
iron ore of 62 percent Fe content for delivery to
China's Qingdao port, which were at $54-55/mt CFR last week, have remained at the same level at the start of the current week. Last week, transaction activity in the Chinese
iron ore market was weak due to the National Day Holiday (October 1-7). On the other hand, with Chinese buyers stepping up their restocking activity,
iron ore prices increased by $0.5/mt on October 8.
Against the backdrop of the fluctuating trend seen in
iron ore prices, research company BMI Research has predicted that
iron ore prices will remain in the range of $55-60/mt in the fourth quarter this year, but will drop to $44-55/mt in 2016. Basing its predictions of a downtrend in
iron ore prices on the strengthening of the US dollar, weak
iron ore demand in
China and major miners' plans to reduce their
iron ore production costs, BMI has stated that the global
iron ore majors will continue to ramp up production in order to squeeze out higher-cost competitors.
Meanwhile, Goldman Sachs has stated that demand for
iron ore imports will probably peak next year, while mining capacity continues to rise. It has also repeated its forecast for prices to drop to $44/mt next year and $40/mt in 2017.
On the other hand, in August this year Brazilian
iron ore producer Vale's exports decreased by 12.1 percent year on year, even though the company had increased its investments in order to reduce production costs and despite the 25 percent decline recorded in
iron ore prices since the beginning of this year. In the given month, prices of
iron ore of 62 percent Fe content to CFR
China were 66 percent lower as compared to price levels in August 2014.