Prices of ex-Australia
iron ore of 62 percent Fe content for delivery to
China's Qingdao port, which had started the first week of June on a rising trend, continued this uptrend in the past week and closed the week at $65/mt CFR. As of today, June 15, import
iron ore prices have decreased by $1mt to $64/mt CFR. According to the SteelOrbis Steel Reference Prices, this high price level for imported
iron ore was last seen in January this year. Market players state that the main reason for the uptrend of import
iron ore prices is the decline in
iron ore inventories at Chinese ports. In the week up to June 8, total
iron ore inventories at the 33 main Chinese ports decreased by 2.63 percent to 81.54 million metric tons - the lowest level since late 2013 - thereby providing support for the uptrend of import
iron ore prices. Meanwhile, it is heard that
iron ore inventories at Chinese ports mostly consist of low Fe content ore, while stock levels of
iron ore of 62 percent Fe content, which is commonly used for steel
production, is very low. Accordingly, stocks of import
iron ore of high Fe content in
China are rapidly being exhausted, especially given the strength of demand. Murilo Ferreira, CEO of Brazilian
iron ore producer Vale, has stated that
China's
production of
iron ore of 62 percent Fe content will this year be lower than 200 million mt and that Vale has a positive outlook regarding
iron ore prices in the second half of this year.
From the beginning of April, when import
iron ore prices were at $47/mt CFR, a 40 percent increase has been seen in prices up to the present, while over the same period rebar prices on ex-warehouse Shanghai basis have declined by 12 percent and Chinese rebar export prices have decreased by four percent. This indicates that the declines recorded in finished steel prices have so far failed to exert negative pressure on
iron ore prices. Against this backdrop, the
China Iron and Steel Association (CISA) published a report on June 12 in which stated that the Chinese steel sector will continue to face difficulties in the coming period amid the ongoing upward trend seen in
iron ore prices and the declines observed in finished steel prices.
Despite the ongoing increases recorded in
iron ore prices, most market sources still believe that import
iron ore prices will decline once again in the second half of the current year. This prediction is supported by the
investments of the major iron ore producers,
the expectations of a decline in Chinese crude steel production and by the downward revisions of predictions for the Chinese economy.