As of January 7, the Xinhua-China Iron Ore Price Index for imported iron ore with 62 percent iron content was at 75 points, up four points compared to December 25. Meanwhile, the Xinhua-China Iron Ore Price Index for imported iron ore with 58 percent iron content was at 66 points on the date in question, up three points over the same period, as announced by China's Xinhua News Agency.
Following previous decreases, import iron ore prices for China have been at relatively low levels, thereby stimulating downstream users to purchases ore. Meanwhile, China's central bank announced on January 4 that it will cut the reserve requirement of most banks by 100 basis points, with this development exerting a positive impact on sentiment in the iron ore market. Moreover, following the New Year holiday, steel production restrictions have been lifted in some regions of China, and so Chinese steelmakers have been showing an increased willingness to purchase iron ore. At the same time, inventories of iron ore are at relatively low levels, which will provide some support for import iron ore prices. However, approaching the Chinese New Year holiday (February 2-10), demand from downstream users is unlikely to improve and is expected to become quieter. It is expected that import iron ore prices in the Chinese market will move sideways in the coming week.