The price monitoring center of China’s National Development and Reform Commission (NDRC) has stated that import iron ore prices in China have indicated two sharp rises since the beginning of the current year, due to the Vale dam collapse in Brazil on January 25 which negatively affected expectations regarding iron ore supply and also due to the recent hurricane which negatively impacted iron ore shipments from Australia. As of May 28, Australian iron ore fines with 61.5 percent Fe content were priced at RMB 790/mt ($114.5/mt), the highest level seen since May 2014. Market analysts point out that, in addition to import iron ore prices, coking coal and coke are facing upward pressure. Chinese steelmakers’ profitability has been negatively affected and so their financial results for the second quarter are expected to be impacted.
The NDRC price monitoring center expects that iron ore supply will improve as of the third quarter of the year and that import iron ore prices will then indicate a gradual softening.