China's import iron ore market has increased slightly in the past week, though transaction activity has been on the low side. With the steel product market coming into the off season, the iron ore market has also been affected. Meanwhile, the Chinese central bank has hiked interest rates by 0.25 percentage points, effective as of July 7. This will result in increased tightness of funds in China's iron ore market.
Brazilian miner Vale declared recently that its annual iron ore output will hit 469 million mt by 2015, down 10 percent on its prediction made on October 28 last year. Vale's main concerns regard demand slowdown in China and possible anti-inflationary interest rate hikes in Brazil. Vale produced 71.54 million mt in the first quarter of the current year, up 3.6 percent year on year. It expects its iron ore production will rise up one percent to 311 million mt in 2011.
Imported iron ore prices in China rebounded this week after the decrease in the previous week. 63.5 percent Indian fines truck-loaded price is reported at $202.5/mt - up $1.6/mt week on week. PB fines is offered at $191.7/mt - increasing by 1.6 percent week on week. The domestic iron ore market has been quiet this week. 66 percent iron ore concentrate is offered at $141.4/mt, down $1.6/mt week on week. Imported iron ore inventory is currently abundant at the ports. As steel sales have suffered lately and as the steel mills are under financial strain, weakness in iron ore prices appears unavoidable. It is though that iron ore prices in China will drop in the coming one or two weeks.