Prices of ex-Australia iron ore of 62 percent Fe content for delivery to China's Qingdao port, which have continued their gradual upward movement since November 22, have increased by $1/mt since last Friday, starting the current week at $80.4-80.9/mt CFR China. As of November 21, inventory of iron ore at 33 major Chinese ports amounted to 101.03 million mt, up 1.48 million mt or 1.49 percent compared to the inventory level recorded on November 14, as announced by China's Xinhua News Agency.
The increases seen in Chinese futures markets last week following the news that the Chinese government will implement production cuts in Tangshan between November 15, 2016, and March 15, 2017, in order to reduce air pollution have provided support for global iron ore prices. Additionally, today, November 28, Chinese steel futures prices started move up against the backdrop of the news that the authorities are continuing to conduct investigations in Hebei and Jiangsu as part of precautions taken to prevent illegal increases in capacity usage rates. As a result, iron ore prices have maintained their upward trend.
Daniel Hynes, ANZ commodity strategist, stated that steel supply has declined due to the production cuts in China, causing steel quotations to rise and dragging raw material quotations up with them. Also, Hynes mentioned that the risk of tightened iron ore supply in Australia - the world's biggest iron ore exporter - means an increase for steel-related raw material prices in the short term, while he believes cyclones forecast for Western Australia may hit iron ore exports. Over the past 12 years, Australia's iron ore exports have each year declined by an average of 5.4 percent in the January-March period from the previous quarter, he said.