Iron ore price rise almost fully offsets drop seen this week, but outlook still weak

On Friday, August 23, prices for of Australian iron ore fines with 62 percent Fe content have increased further adding $4.25/mt and reaching $89/mt CFR, which is just $0.5/mt below the level seen late last week. Prices for Brazilian 65 percent Fe content have gained $3.5/mt to $97/mt CFR over the day.

Trading activity has been at healthy levels over the day with customers focusing on purchases of higher grader Brazilian fines with 65 percent Fe content. Prices at Chinese ports have gained as well but at a much slower pace with trading activity also at higher levels than earlier this week, SteelOrbis was informed.

Futures prices at Dalian Commodity Exchange have gone up by two percent reaching RMB 604/mt. A slight increase has been seen in the steel segment with prices posting increases in both the physical and futures markets.

Nevertheless, most market participants have assessed the rebound seen late this week as a “correction”, but not like a reversal of the downward trend. “There are some expectations that in the September-October period steel prices will be higher amid better demand, but it is unlikely to push iron ore above $100/mt CFR again. I feel the raw material will fluctuate near $90/mt CFR,” a trader said. Sintering and blast furnace production restrictions in Hebei will keep demand for iron ore at reduced levels at least until the end of the month. 

Deals for iron ore in the overseas market on August 23