After the sharp price declines recorded in the
iron ore market for 62 percent Fe content
iron ore delivered to
China's Qingdao port at the beginning of April, Chinese steel producers wanted to take advantage of the increased attractiveness of
iron ore prices and accelerated their purchases. As a result, the downward trend of
iron ore prices was replaced by a rising trend in the third week of the month. Last week, the upward movement of
iron ore prices gained momentum amid rumors of financial incentive measures to be implemented by the Chinese government to boost the domestic economy and due to Australian miner BHP Billiton's announcement of the postponement of its port project aimed at increasing its annual production capacity to 290 million mt. On April 24, the price of 62 percent Fe content
iron ore delivered to Qingdao increased by $3/mt to $57/mt.
Iron ore prices have started the current week with an upward trend, rising to $59/mt CFR Qingdao today, April 27.
Iron ore prices have increased by 25.5 percent since April 2, the day
iron ore prices had declined to $47/mt CFR Qingdao, the lowest level recorded in the last 10 years,
The upward trend of
iron ore prices has come as a surprise to the global market. At the same time, it has provided some hope for
iron ore miners which were under cost pressure amid the weak trend of
iron ore prices in March and April. However, some Chinese
iron ore miners were forced to halt their production activities due to higher costs in the given period and are still out of the market. In March,
iron ore imports to
China rose by nine percent year on year to 80.51 million mt, while Chinese domestic
iron ore production declined by 13.8 percent year on year to 105 million mt.
Some market sources believe that the current trend of
iron ore prices will continue in the coming period, while others think that the increases recorded in prices are artificial, since no improvement has been seen in the main factors in the market. Market sources believe that the improvement seen in
iron ore prices can be considered to be artificial as long as the investments in low-cost
iron ore production by major global miners (though some have been postponed) continue, as long as
China's economy maintains its slowdown, and while efforts to solve the oversupply issue in the Chinese steel industry continue.