Prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port have moved down by $0.5/mt on Monday, August 14, compared to last Friday, starting the current week at $74.35-75.05/mt CFR China.
Last week, with new production cuts becoming the main topic in the Chinese steel industry, the Chinese futures markets had started the week with a sharp rise, resulting in increases in global iron ore prices. Meanwhile, Chinese mills continued to make iron ore bookings due to their high capacity utilization rates. Amid the positive sentiment in the market, global iron prices moved on an upward trend until the meeting held by the China Iron and Steel Association (CISA) last Friday, August 11. At the meeting, representatives of major steelmakers, futures exchanges, futures trading brokers and steel industry news portals discussed the rapid rises seen recently in China in finished steel prices, ferrous metal futures prices and steel company share prices. The attendees agreed that the sharp rises seen in finished steel futures prices were not due to improved demand or to significant declines in supply, but due to the excessive importance attributed by some futures brokers and news portals to capacity elimination, the shutdown of low-grade construction steel production and air pollution control plans.
Following the CISA meeting, the iron ore futures market in China switched to a downward trend, which has continued today. Market sources state that most Chinese mills’ iron ore inventories are on the high side and so they are expected to be cautious about concluding new iron ore bookings in the coming days. Meanwhile, China has decided to put into practice the resolution of the United Nations Security Council which bans North Korea's exports of coal, iron, iron ore, lead, lead ore and seafood. The decision is expected to be effective from Tuesday, August 15, while market sources state that the crackdown on North Korean iron ore exports is unlikely to cause big ructions in the global market.