Prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port, which moved in the range of $53.5-55.5/mt CFR last week, have increased by $0.5/mt since last Friday, starting the current week at $55.5-56/mt CFR China. As of July 4, inventory of iron ore at 33 major Chinese ports amounted to 95.74 million mt, up 1.89 million mt or 2.01 percent as compared to the inventory level recorded on June 27, as announced by China's Xinhua News Agency.
In the last week of June, iron ore prices recorded a slight increase, following the rises seen in the Chinese steel futures market. Even though iron ore prices started the month of July on an upward trend in line with the increases in prices of semi-finished and finished steel in the Chinese domestic market, they moved on a fluctuating trend afterwards due to weak demand in China and the oversupply in the global markets. In the coming period, demand in the local Chinese finished steel market is expected to increase after the rainy season and this situation is expected to provide support for iron ore prices. However, considering the oversupply problem in the global iron ore market, iron ore prices are expected to move on a fluctuating trend and to soften in the short term.
Meanwhile, prices will probably decline in the third quarter this year due to weak downstream demand and ongoing strong shipping volumes from Australia and Brazil, according to Citigroup. Besides, after the investment bank Morgan Stanley increased its iron ore price forecast for this year from $30/mt to $35/mt CFR, Australia, the world’s biggest iron ore exporting country, has also announced its new forecast, revising its prediction downwards. Accordingly,Australia’s Department of Industry, Innovation and Science has cut its forecast to $44.2/mt CFR from $45/mt for the last quarter of this year, while lowering its 2017 price forecast for iron ore to $44/mt CFR, down from its previous prediction of $55/mt.