Prices of iron ore of 62 percent Fe content for delivery to China’s Qingdao port, which fluctuated last week in the range of $53-55/mt CFR China, have started this week at $52-52.5/mt CFR China. As of October 12, inventory of iron ore at 33 major Chinese ports amounted to 77.27 million mt, down 4.31 million mt or 5.28 percent compared to the inventory level recorded on October 5, as announced by China's Xinhua News Agency last week. However, the downtrend in iron ore prices, which started last week, is continuing this week due to weak demand in China for iron ore.
Last week, Australian iron ore producers Rio Tinto and Fortescue announced increased production and shipments in the third quarter this year as compared with the same period of 2014. During the third quarter, Rio Tinto’s global iron ore production rose by 12 percent year on year to 86.1 million mt, while its global iron ore shipments amounted to 91.3 million mt, up 17 percent year on year. Meanwhile, in the third quarter Fortescue mined 45.1 million mt of iron ore, seven percent more than in the previous quarter and up five percent year on year, while its iron ore shipments totaled 41.9 million mt, increasing by one percent year on year and registering a fall of 1.17 percent from the previous quarter.
While large-scale iron ore producers have announced increased production results, small-scale miners continue to report production cuts. Today, October 19, Australia-based Arrium Limited stated that they are continuing to target lower production costs since iron ore prices may fall further and they forecast a sharp fall in their production for the future period. In this context, like other small-scale miners, Arrium is also reviewing its company organization due to the downtrend of iron ore prices. Andrew Roberts, Arrium managing director and CEO, stated that they have made significant progress in cutting their production costs.