In 2014, import iron ore prices in China started the year at $133/mt CFR, declined by fifty percent during the course of the year and closed the year at $68/mt CFR. The overall expectations are for import iron ore prices in 2015 to continue their downward movement and decline to the range of $60-65/mt CFR.
With the Chinese government announcing the cancellation of the export tax rebate on boron-added steel products, it was expected that Chinese finished steel exports would slow down and that Chinese steel producers' demand for iron ore would decline, which would accordingly contribute to the downward movement of prices. On the other hand, iron ore inventory in China has fallen to low levels as Chinese iron ore producers have decided to suspend their production until springtime because of the severe winter conditions and limited iron ore supplies from foreign mining companies because of decreased prices. However, since the beginning of this week, import iron ore prices, which were at their lowest levels in five years, have rebounded to $71/mt CFR. While the sudden rise in import iron ore prices has caused confusion in the global steel markets, China has decided to accelerate its infrastructure spending in 2015 and is expected to spend $1.5 trillion on 300 infrastructure projects. Thus, Chinese steel producers' demand for iron ore has seen a sharp increase, while the low iron ore inventory levels at Chinese ports has provided support for the upward movement of prices.
However, the general outlook for import iron ore prices in China in 2015 is still for prices to move downwards, even if demand and prices have increased at the start of the year. It is thought that the largest overseas iron ore miners will increase their production to meet the higher demand. However, some steel producers in China may have to cut their production as China has decided to widen its regulations regarding environmental protection this year. Accordingly, this situation is expected to exacerbate the problem of oversupply of iron ore. When all eventualities are considered, it is thought that the weak demand versus high supply issue in the global iron ore market, which has been evident since 2014, will not be resolved in 2015.
On the other hand, the most recent important news from Turkey in relation to iron ore has been the cancellation on December 31 of the country's one percent customs duty on iron ore imports.