Having closed last week with a downward movement, prices of ex-Australia iron ore with 62 percent Fe content for delivery to China’s Qingdao port started this week with an increase, rising by $2.16/mt to $119.20-120.37/mt CFR China on Monday, July 15, as compared to Friday, July 12. Today, Tuesday, global iron ore prices have continued their upward movement increasing to $119.94-121.11/mt CFR China.
Global iron ore prices had started the first day of last week with an upward movement, since demand for iron ore at Chinese mills was at decent levels on the back of their high capacity utilization rates, but arrivals of import iron ore at Chinese ports did not increase although giant miners increased their iron ore shipments. Subsequently, after mid-week, global iron ore prices decreased as the Chinese authorities announced that they were taking steps to investigate the reasons for the sudden and sharp rises in global iron ore prices and since demand was slack due to the stagnant summer season.
While global iron pre prices have started this week with an upward movement, today Chinese iron ore futures contract prices have reached their highest level since 2013. The rise in the Chinese iron ore futures market is related to the ongoing tightness of import iron ore supplies and also since Chinese manufacturing output grew by 6.3 percent in June, higher than expectations, thereby reassuring Chinese market players as regards trading activity for the coming period. However, demand for iron ore in China is not expected to increase due to the slack summer season, while there seems to be a strong possibility of a downward revision in iron ore prices, according to market players.