Following their mostly upward movement last week, prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port have decreased by $0.2/mt on Monday, February 12, as compared to Friday's closing price, starting the current week at $75.57-76.22/mt CFR China. Meanwhile, stock bookings of high grade iron have increased ahead of the Chinese New Year holiday (February 15-21), since, while stockpiles of imported iron ore at Chinese ports are still high, they mostly consist of low-grade material.
Despite their decline recorded on Friday, February 9, spot iron ore prices in China increased by a total of 3.85 percent last week. As no rise was observed in the Chinese steel futures market, this upward movement of iron ore prices in the spot market was linked to the stock iron ore purchases made ahead of the holiday. As the production cuts at Chinese mills will come to an end after the holiday, Chinese crude steel production is expected to increase and iron ore demand is foreseen to accelerate accordingly. According to market sources, iron ore suppliers are unwilling to decrease their prices.
Having completed their iron ore bookings before the holiday, some Chinese steel mills have taken a break from their production. As a result, the Chinese iron ore futures market may move downwards this week, according to market sources. As no significant change is expected in the physical market until the holiday ends, iron ore prices will likely move in line with the Chinese iron ore futures market.