Prices of iron ore of 62 percent Fe content for delivery to China's Qingdao port, which had been declining since mid-June, started last week at $60/mt, while they closed the week down at $55.5/mt CFR. In the first day of the current week, iron ore prices have declined by $2.5/mt compared to July 3 to $53/mt CFR Qingdao. Chinese domestic finished steel prices have continued their declining trend, while some finished steel products have fallen to their lowest price levels in recent years, contributing to the decreasing trend of iron ore prices. Also, Chinese steel producers have profitability concerns amid the decreasing finished steel prices and are not willing to pay higher prices for iron ore. Accordingly, iron ore demand in China is weakening each day and the downtrend of prices is gaining momentum. Also, it is thought that iron ore prices are likely to decrease further in the coming period since some Chinese steel producers are planning overhauls at their mills due to the slowdown in their finished steel sales.
Meanwhile, Australian iron ore producer Atlas Iron, which had halted production at its mines in the Pilbara region following the decrease of iron ore prices to $47/mt in April, has in July has restarted production at its Mount Webber mine in the Pilbara region. Market sources are wondering how the expected declines of iron ore prices will impact the Australian producer in the coming period.