Prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port closed last week with a decrease and have started the current week at $89.6-90/mt CFR China, down $1.6/mt compared to last Friday, March 3. As of February 20, inventory of iron ore at 33 major Chinese ports amounted to 113.42 million mt, down 120,000 mt or 0.11 percent compared to the inventory level recorded on February 13, as announced by China's Xinhua News Agency.
Last week, iron ore prices followed a fluctuating trend in line with the steel futures market, starting the week with an increase, but closing the week with a decline of 0.7 percent week on week. Additionally, during the given week, Chinese steelmakers stepped up their purchases of domestic production iron ore, while they were less interested in concluding purchases of import iron ore, and this has exerted negative pressure on import iron ore prices, while providing support for domestic iron ore prices.
There are two different expectations regarding iron ore prices in the coming period. Some market players indicate that, despite the downward pressure on iron ore demand, liquid steel production cuts announced in China provide support for the steel futures market and for semi-finished and finished steel prices. Besides, the uptrend of the futures market will also likely continue to provide support for prices of semi-finished steel, finished steel and iron ore. On the other hand, other market players expect that, apart from the likely declines in iron ore demand due to liquid steel production cuts, high levels of iron ore inventories and rising iron ore supply will contribute to sharp declines in iron ore prices. According to a report by the Sydney Herald, many analysts believe that global iron ore prices might decline by 30 percent in the second half of 2017, compared to the same period of the previous year.