Global iron ore prices start the week with a decline

Monday, 24 June 2019 17:04:29 (GMT+3)   |   Istanbul

Having increased by 8.2 percent last week, prices of ex-Australia iron ore with 62 percent Fe content for delivery to China’s Qingdao port have declined by $0.21/mt on the first working day of the current week to $114.65-115.74/mt CFR China. 

Last week, global iron ore prices moved upwards as inventories of iron ore at Chinese ports decreased to their lowest levels during the past two years and since Chinese traders’ iron ore stocks also declined. With the support of the announcement by Australian iron ore producer Rio Tinto, stating that its shipments will likely decrease in July, iron ore prices continued their upward movement until the last day of the week. Rio Tinto also reduced its forecast for iron ore shipments for 2019 from 333-343 million mt to 320-330 million mt, causing iron ore futures at Dalian Commodity Exchange to rise sharply. 

However, the upward movement of iron ore prices ended on the last day of the week as Vale announced that it would resume its operations at its Brucutu mine and so global iron ore prices decreased slightly. This development is expected to ease the supply problems in the iron ore market. Meanwhile, Vale reaffirmed its iron ore and pellets sales guidance of 307-332 million mt for 2019.

Although municipal government of Tangshan in the Chinese state Hebei announced a new round of steel production restrictions until August 1, demand for raw materials in China is still strong. Although Vale is expected to resume production at its Brucutu mine, strong demand for iron ore in the Brazilian domestic market and the tightness of supplies at Chinese ports is expected to support iron ore prices in the coming period.

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