Prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port ended last week with an increase, while they have started the current week at $92-92.4/mt CFR China, up a further $1.8/mt compared to last Friday.
Last week, after Chinese iron ore futures prices had hit their highest level of the past two years on Monday, global iron ore prices rose by $5.8/mt, resulting in increased iron ore purchases by Chinese buyers. During the course of the given week, iron ore prices rose by a total of nine percent, despite occasional slight declines.
In the current week, the Chinese futures market has started the week with an upward movement and Chinese semi-finished and finished steel prices have indicated sharp increases. Accordingly, global iron ore prices are not expected to weaken. On the other hand, Australian iron ore miners BHP Billiton and Fortescue Metals Group are expected to announce their financial results, according to which analysts will likely make upward revisions to their iron ore price forecasts for 2017.
Lachlan Shaw, an analyst at the investment bank UBS, said iron ore prices are much stronger than the bank had anticipated. “Even with record high (Chinese port) stocks, most other signals remain supportive in the short term and seasonally strong demand in the second quarter beckons,” Mr. Shaw said. He added that the company’s average 2017 forecast of $56/mt is likely to be revised to $66/mt.