The price of Brazilian high-grade iron ore, 65 percent iron contents, is $119/mt today, against $113/mt on August 4, CFR China conditions.
After a $8/mt decline in a single day last week, the price of the high-grade ore has now increased by $6/mt, maintaining an oscillating pattern described by sources as ultimately deriving from news about the Chinese economy.
In an interview with the Brazilian newspaper Valor Econômico, Jose Carlos Martins, the former ferrous metals director of Vale, mentioned that other factors influencing iron ore prices and other commodities are the war in Ukraine, heavily impacting Europe; high inflation rates; high interest rates; and economic recession, chiefly in the US, but also affecting the UK, France and Japan.
Martins mentioned that Chinese authorities have decided to adopt a series of measures destined to reduce speculation in the housing sector, due to the existence of an estimated 50 million unsold houses, with a heavy impact on the demand for construction materials, including steel, and iron ore as consequence.
However, sources maintain expectations for increased iron ore prices during the second half of 2022, and an average price for the Brazilian high-grade product around $125/mt during the period.
The price of blast furnaces grade pellets is now $145/mt, against $140/mt previously, with the same premium ascribed to the product, in relation to the equivalent sinter feed fines.
In the Brazilian domestic market, the prices are now estimated at $85/mt for the iron ore and $112/mt for the pellets, against respectively $80/mt and $106/mt previously, ex-works, no taxes included.
The premium of the high-grade ore, in relation to the 62 percent Australian iron ore, is now 3.5 percent, from 3.9 percent previously, a low figure in historical terms, showing low demand for high-grade products.