Prices of ex-Australia iron ore with 62 percent Fe content for delivery to China’s Qingdao port made an upward start to last week but followed a downward trend as of Tuesday, March 19, and decreased to $84.72-85.82/mt CFR China in the following days. However, ex-Australia iron ore with 62 percent Fe content for delivery to China’s Qingdao port closed last week at the average price level of $85.77/mt CFR China after rising slightly on Friday, March 22. Meanwhile, the prices in question have made a downward start to the current week, with a decline of $0.15/mt as compared to Friday to $85.07-86.17/mt CFR China. On the other hand, export offers of high quality iron ore with 65 percent Fe content from Brazil have increased by $0.1/mt today, March 25, starting the current week at $95.91-96.91/mt CFR China. Meanwhile, on the first work day of the current week, iron ore demand in China is still at low levels, while buyers are cautious as regards new purchases due to high price levels.
Last week, price movements in the global iron ore market were influenced by the various announcements made by Vale during the course of the week. The rise seen in iron ore futures contract prices at the beginning of last week was viewed as resulting from concerns caused by the suspension of production at Vale’s Timbopeba mine, which implies a decrease of 83 million metric tons in annual iron ore supply. On the other hand, following Vale’s announcement that it may open its Brucutu mine and the Laranjeiras tailings dam if it succeeds in obtaining approval from the environment protection agency in Brazil, prices of medium and high quality iron ore softened, with iron ore futures contract prices following suit on Wednesday. While there was a possibility that the Brucutu mine with its 30 million tons of annual capacity could be reopened, it was reported on Thursday, March 21, that Vale’s Alegria mine had failed safety tests and so will be closed, with a possible production shortfall of 10 million metric tons. However, market sources note that the Alegria mine is not expected to remain closed for long.
Meanwhile, Australia’s most important port for iron ore exports was affected by a tropical storm on Friday, March 22, and so activities at the port were temporarily halted. As a result, iron ore prices closed last week with a slight increase.
Amid the disruptions in ex-Australia iron ore shipments and given Vale’s production cuts, the global iron ore market continues to be plagued by uncertainties. Accordingly, iron ore quotations are expected to maintain their fluctuating trend in the short term.