Having moved down last week, prices of ex-Australia iron ore with 62 percent Fe content for delivery to China’s Qingdao port have increased by $0.47/mt on the first working day of the current week to $93.49-94.59/mt CFR China.
Iron ore prices started last week with an increase amid Chinese government’s announcement that it will provide support for domestic economy and due to the worries of a decline in iron ore supply resulting from implementation of level II emergency response measures in Tangshan province effective from 8:00 on April 20 to 24:00 on Aril 25 against the backdrop of the anticipated increases in air pollution. However, Chinese finished steel buyers adopted a cautious stance in the second half of last week given the approaching summer season when trading activity traditionally trends slower. Additionally, Chinese steel futures markets moved down in this period. As a result, global iron ore prices closed last week with a downtrend.
Since Chinese liquid steel producers have accelerated their productions ahead of the Labor Day holiday (May 1-4), they have also increased their restocking activities. Accordingly, global iron ore prices have started the current week with an increase. Market sources state that Chinese liquid steelmakers wish to strengthen their raw material inventories before the monsoon rains begin in May.
Market players expect raw material restocking activities to be mostly completed after the Labor Day holiday, and so they foresee a slowdown in global iron ore demand.