In the first half of June, a gradual increase continued to be observed in import iron ore prices of 62 percent Fe content for delivery to China's Qingdao port, while prices started to fall once again last week, opening the week at $64/mt CFR but closing the week at $61/mt CFR. Despite the increases recorded in import iron ore prices in China since the beginning of April, weak demand and soft prices in the local Chinese finished steel market are the main reasons for the softening seen in iron ore prices during the past week. Under the influence of China's Dragon Boat Festival on June 20, import iron ore prices in the country have moved sideways in recent days.
Chinese steel producers' local sales have become more sluggish, while the producers started to resist paying higher prices for iron ore last week, thereby putting pressure on iron ore producers' prices and negatively impacting iron ore market prices which had been increasing over the previous three months. With the traditionally slow summer season starting in China, expectations of a further decline in steel demand in the local Chinese market have increased and predictions for iron ore prices in the coming period have been revised downwards. Additionally, iron ore stocks at Chinese ports, which were very low for a while, have increased somewhat. In the coming days, stock levels at the ports are expected to increase further and so rising supply may cause declines in iron ore prices. On the other hand, Goldman Sachs in a report issued on June 21 predicted iron ore prices for the third quarter at $49/mt and estimated a price level of $48/mt for the fourth quarter, with prices expected to close the year at this level.