Prices of ex-Australia iron ore with 62 percent Fe content for delivery to China’s Qingdao port have decreased by $0.23/mt on Monday, March 4, as compared to the closing price at the end of last week, starting the current week at $86.87-87.97/mt CFR China. Prices had risen by a total of 2.63 percent last week, recovering from a decline in mid-week, closing the week at $87.1-88.2/mt CFR China, Meanwhile, prices of ex-Brazil iron ore with 65 percent Fe content have increased slightly at the start of the current week.
On Thursday and Friday last week, iron ore prices moved upwards in line with the increases in the Chinese iron ore futures market. Iron ore prices have started the current week with a slight decline in line with the downward movement of the futures market. Although purchases were at low and medium levels throughout last week, demand improved slightly towards the end of the week due to concerns that supply disruptions are likely to affect steel mills more than had been previously anticipated.
Amid the tightening of ex-Brazil iron ore supplies, the slowdown in Chinese steel producers’ iron ore bookings is viewed as a sign that they are searching for cheaper alternatives for their iron ore transactions due to the ongoing rises seen in ex-Australia iron prices during February. As a result of the high levels of iron ore prices, Chinese steel producers are trying to continue their production with low iron ore inventories, according to market sources. In previous weeks, Indian miners had increased their prices for iron ore with 62 percent Fe content, taking the advantage of the tightening of iron ore supplies and the increases in iron ore prices in the global market. Having boosted their sales as a result of this situation, Indian iron ore suppliers will likely continue to conclude sales in the short term.
Considering that Brazilian suppliers hold a share of almost 20-25 percent in China’s iron ore imports, it seems that it will take some time for iron ore prices to settle amid the significant tightening seen in supplies.