Prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port, which moved in the range of $58.5-59.5/mt CFR last week, have trended sideways since last Friday, starting the current week at $59-59.5/mt CFR China. As of August 29, inventory of iron ore at 33 major Chinese ports amounted to 101.18 million mt, down 1.33 million mt or 1.3 percent compared to the inventory level recorded on August 22, as announced by China's Xinhua News Agency.
During the month of August, iron ore prices fluctuated in the range of $58.5-62/mt CFR, impacted by the production cuts at Chinese steel mills, weak demand and the fluctuating trend of semi-finished and finished steel prices in the Chinese domestic market. Following the Tangshan government’s mandatory imposition of production cuts at local steel mills until August 31 in order to reduce environmental pollution, iron ore prices started the month of September on a sideways trend. After recording a slight increase last Friday, September 2, iron ore prices have also begun the current week with a sideways movement. Meanwhile, anticipated discussions at the G20 summit in China, regarding the oversupply problem in the Chinese steel industry and its solutions, are likely to impact the iron ore price trend in the coming period. Accordingly, iron ore prices are expected to continue their fluctuating trend in the short term, while occasional slight decreases in prices are also anticipated amid weak demand.
Meanwhile, investment bank Morgan Stanley has shared its latest outlook regarding the iron ore market and price trend. Morgan Stanley analysts noted market concerns over the sustainability of iron ore prices at around $60/mt. Also, S&P has recently raised its forecasts for iron ore to $50/mt for the rest of 2016 and to $45/mt in 2017, due to the positive momentum in China’s steel sector. Meanwhile, Credit Suisse has become the latest investment bank to express caution regarding the iron ore market.