Prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port, which moved in the range of $55.15-56.95/mt CFR last week, have trended sideways since last Friday, starting the current week at $55.15-55.65/mt CFR China. As of September 26, inventory of iron ore at 33 major Chinese ports amounted to 93.75 million mt, down 1.78 million mt or 1.86 percent compared to the inventory level recorded on September 19, as announced by China's Xinhua News Agency.
During the past week, iron ore prices moved sideways on some days, but generally moved on a soft trend, while trading activity in the Chinese iron ore market remained at weak levels. Today, October 3, iron ore prices have started the current week with sideways movement due to the Chinese National Day Holiday (October 1-7), while for the rest of the week demand is likely to remain slack, while prices are expected to move sideways. Meanwhile, restrictions on Chinese liquid steel production will be eased and Chinese iron ore demand is expected to increase slightly following the end of the Tangshan International Horticultural Expo on October 16. However, the increase in Chinese iron ore demand will likely remain limited as a result of weak finished steel demand and the downward pressure on iron ore prices will only ease a little.
Today, Fortescue CEO Nev Power shared his thoughts regarding the iron ore market, stating that there is stability in demand in China and most of the new large volume supply has already come on to the market. Meanwhile, Citi Group reckons Brazil and Australia will add about 200 million mt of iron ore to the market by 2020, deepening the global glut and denting prices. The outlooks issued by investment banks and analysts for iron ore prices have improved slightly and now stand in the range of $45-60/mt CFR China for the end of 2016.