Prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port, which moved in the range of $55-57/mt CFR last week, have increased by $1/mt since last Friday, starting the current week at $56.5-57/mt CFR China. As of July 11, inventory of iron ore at 33 major Chinese ports amounted to 100.29 million mt, up 3.56 million mt or 3.68 percent as compared to the inventory level recorded on July 4, as announced by China's Xinhua News Agency.
During the month of July, iron ore prices have moved on a fluctuating trend amid the ups and downs in the Chinese steel futures markets. Meanwhile, Tangshan government authorities have ordered heavy industry, including steel smelters, to curb or halt production in late July amid commemorations for the 40th anniversary of the powerful earthquake that struck the city. As a result, iron ore prices, which started the last week of July on a slight uptrend, are expected to record minor increases this week, from July 25 to July 29.
In the coming period, iron ore prices are expected to continue their downward trend in the long term since the steel oversupply problem continues to be observed even though China states that it is taking measures regarding the issue. However, in the short term, iron ore prices may move up slightly due to the increased demand in China. Meanwhile, investment bank Morgan Stanley has increased its forecast for iron ore prices for the last quarter of this year from $30/mt to $35/mt, while Australia has decreased its outlook for iron ore prices for the same period from $45/mt to $44.2/mt. Besides, Citigroup has stated that iron ore demand in China may increase surprisingly, though it has kept its forecast for the last quarter at $49/mt. Several analysts still expect the price of iron ore to fall as global supply continues to outstrip demand, with forecasts ranging from $40/mt to the low $50s/mt over this year and next.