Having closed last week with an upward movement, prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port have increased by $0.5/mt on Monday, October 9, compared to last Friday, starting the current week at $62.35-63.05/mt CFR China.
Global iron ore prices declined by 2.5 percent last week as compared to the previous week due to the long holiday in China. However, on Friday, October 6, iron ore prices moved upwards amid anticipation of a recovery of demand for semi-finished and finished steel in China after the holiday.
With the long holiday in China now over, the Chinese steel futures market has started this week with a downward movement. Despite the raw steel production cuts in China which so far have been partially implemented and which are to be continued in the coming period, steel prices in the Chinese spot market - which had begun today with slight increases - have switched to a downward trend due to the declines seen in the futures market. However, having abstained from concluding iron ore bookings before the holiday, Chinese steel mills have accelerated their iron ore purchases in order to increase their inventories to desired levels, thereby causing global iron ore prices to move upwards.
In the short term, market sources state that domestic demand in the Chinese steel spot market is expected to increase and prompt spot prices to move upwards accordingly. However, cuts in raw steel production in China may exert downward pressure on global iron ore prices.