The price of the 65 percent iron sinter feed fines of Brazil has increased to $259/mt from $242/mt late last week, CFR China conditions, maintaining an oscillating pattern at high historical price levels.
Sources mentioned that the increase reflects a decline in iron ore stocks in Chinese ports, resulted from the increased Chinese production of crude steel in April. They believe that such high level of iron ore prices finds no support when considered the supply/demand balance, as the seaborne supply remains stable from both Australian and Brazilian supplies.
But sources say if China fails to control its steel output, the country could be on the way to reach another year of record-breaking steel production, postponing a correction of iron ore prices to late this year or even for 2012.
Despite having implemented plans to reduce crude steel production, as an alternative to reduce the level of emissions, so far in the year the Chinese crude steel production has increased by around 15 percent from the same period in 2020.
The demand for the Brazilian high grade ore in China remains intensive, due to the reduced level of emissions associated to its utilization in blast furnaces.