Having moved on a fluctuating trend last week, prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port have moved down by $0.2/mt as of today, Monday, September 17, as compared to the closing price at the end of last week, starting the current week at $67.70-68.80/mt CFR China. Additionally, as of September 10, inventory of iron ore at 33 major Chinese ports amounted to 124.67 million mt, down 0.05 percent compared to the inventory levels recorded on September 3, as announced by China's Xinhua News Agency.
Last week, the Chinese steel futures market recorded sharp declines following rumors that winter production cuts would not be as strict as expected and that details of the production cuts would be determined by regional governments. The downward movement of the futures market was reflected in the spot market and iron ore prices decreased up to the middle of the week. Although the Chinese government made no official announcement and just stated that the rumors about production cuts were speculative, the rumors which were contrary to the Chinese government’s plans of cutting steel production by 50 percent, impacted sentiment in the market. Later in the week, the US government invited the Chinese authorities to continue negotiations on resolving the trade conflict between the two countries, with these developments having a positive impact on the global market. Accordingly, prices of steel and import iron ore in China moved upwards and the downward movement in the Chinese futures market ended.
However, with the US government under Trump expected to approve and sign the implementation of tariffs on $200 billion worth of Chinese imports in the near term, the Chinese futures market and iron ore prices may be negatively impacted in the short term.