Having closed last week with an increase of 0.67 percent despite their mostly downward movement during the week, prices of ex-Australia iron ore with 62 percent Fe content for delivery to China’s Qingdao port have increased by $3.5/mt on Monday, January 28, as compared to the closing price at the end of last week, starting the current week at $77.3-78.4/mt CFR China. The explosion at Vale’s iron ore tailings dam in Brazil has caused global iron ore prices to start the current week with a sharp increase.
The main reasons for the falling trend of iron ore quotations last week were slower demand and transaction activities as Chinese producers had mostly completed the replenishment of their stocks. However, SteelOrbis has been informed that iron ore usage in sintering machines has increased over the past two weeks, signalling the ongoing strength of demand for iron ore in China. Chinese market players are expected to leave the market at the end of the current week as the Chinese New Year holiday starts on February 2, while they are expected to return to the market in the second week of February. In this period, no significant development is foreseen in China’s iron ore demand.
On the other hand, US commerce secretary Wilbur Ross has said the outcome of the negotiations between the US and China “will hinge on whether Beijing will deepen economic reforms and further open up its markets”. An announcement is expected regarding the latest developments following Chinese deputy prime minister Liu He’s talks with US trade representative Robert Lighthizer in Washington to be held on January 30-31. Any development at these talks is expected to influence steel futures contracts as well as the trend of global iron ore prices.