Having followed an upward trend over the past week, prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port have increased by $0.9/mt on Monday, January 8, compared to last Friday, starting the current week at $77.37-78.02/mt CFR China. Meanwhile, as of January 2, inventory of iron ore at Chinese ports amounted to 148 million mt, up 1.87 million mt week on week.
Even though the Chinese iron ore futures market moved downwards throughout last week, iron ore prices increased in the physical market. As the maintenance works at blast furnaces in China have ended, capacity utilization rates in the Chinese steel industry have increased, providing support for the upward trend of global iron ore prices, which rose by a total of 5.79 percent last week. Also, the rises in domestic billet prices in China and the increases in cargo handling costs have positively impacted global iron ore quotations.
According to some market participants, iron ore prices will likely move downwards in the short term as trading activity in the Chinese steel market has declined and as construction works in the country have slowed down amid harsh weather conditions. However, other market sources state that Chinese mills will increase their stock bookings for iron ore before the Chinese New Year holiday in mid-February. The common opinion in the market is that global iron ore prices will fluctuate in line with the iron ore futures market in the short term.