Prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port, which began last week at $56.5/mt CFR China, gradually increased during the week and closed the week at $59/mt CFR. Iron ore prices have decreased slightly by $1/mt compared to last week, starting the week at $58/mt CFR China. Market players state that the reason for this uptrend of iron ore prices is tight supply of iron ore cargos due to some problems in shipments in Chinese ports.
Recently, US-based investment bank Goldman Sachs and London-based Capital Economics had forecast a declining trend for iron ore prices. So, the uptrend of iron ore prices during the last week came as a surprise to market players, however this surprise was replaced by the predictions of a short-lived uptrend. Besides, according to a report released by the China Iron and Steel Association (CISA) on September 7, demand for iron ore will likely slacken due to ongoing weak demand for finished steel in the country. CISA stated that iron ore prices in China are unlikely to see a continuation of their upward movement in the coming period, but instead will fluctuate within a limited range. Also, as stated by the CISA, the ongoing softness of finished steel prices will result in more serious challenges for steel enterprises’ operations against the background of the devaluation of the Chinese currency. In this context, CISA predicts that iron ore prices in China are not likely to continue their upward movement in the coming period.