Prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port, which moved in the range of $56.5-60/mt CFR last week, have increased by $1.5/mt since last Friday, starting the current week at $60.5-61/mt CFR China. According to Bloomberg, iron ore inventories at Chinese ports have increased by 0.4 percent week on week to 106.05 million mt.
Even though the Chinese futures market had started to move downwards as of the third week of July, prompting iron ore spot market prices to decrease for a short while, in the last week of the month iron ore prices started to rise again amid the increases seen in the futures market and with market analysts increasing their iron ore price forecasts. Overall, iron ore prices increased by a total of eight percent during the month of July. Meanwhile, Goldman Sachs Group has raised its three- and six-month iron ore forecasts in a new report. According to Goldman, iron ore will trade at $50/mt in the coming three months and $40/mt in the coming six months, up from the previous respective forecasts of $45/mt and $35/mt. Although the global oversupply problem continues to exert downward pressure on iron ore prices, the prices are expected to move on a fluctuating trend in the coming period. With speculative price movements in the market likely to contribute to this fluctuating trend together with the ups and downs in the Chinese futures market, iron ore prices are expected to move in the range of $40-50/mt in the last quarter of 2016.
Meanwhile, Chinese miners are demanding an antidumping investigation against imports of iron ore from Brazil and Australia, the world’s top providers of the commodity. Citing a statement from the Metallurgical Miners' Association of China, Reuters said more than 20 Chinese miners have called for tougher measures against imports of iron ore coming from Brazil and Australia. The association said “a huge volume” of low-priced imported iron ore has severely impacted the domestic mining industry and represents a “big challenge” for the security of domestic steel production. According to the Chinese association, the capacity of major overseas producers has continued to increase and requires “a massive Chinese market to absorb their great excess.”