Prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port, which moved in the range of $55.15-55.65/mt CFR last week, have increased by $1/mt since last Friday, starting the current week at $56.15-56.65/mt CFR China. Thus, import iron ore prices, which decreased to its lowest level since early July ahead of the Chinese National Day holiday (Oct. 1-7), have moved upwards as the holiday ended.
Last week, iron ore prices moved sideways due to the Chinese National Day holiday. With the announcement from Australian miner Fortescue Metals Limited today, stating that it has agreed to acquire Australian iron ore development company BC Iron Limited’s 75 percent interest in the Nullagine joint venture, Chinese iron ore futures market moved upwards, resulting with a slight increase in iron ore prices. Meanwhile, the ongoing weak finished steel demand in China is not likely to recover following the end of the Tangshan International Horticultural Expo on October 16. Therefore, even though crude steel output in China is expected to increase after the expo, iron ore demand in the country is likely to indicate a limited rise as a result of weak finished steel demand.
Currently, the outlooks issued by investment banks and analysts for iron ore prices stand in the range of $45-60/mt CFR China for the end of 2016. Meanwhile, in Australia's latest quarterly outlook published by the Department of Industry, Innovation and Science, the country has revised its iron ore price outlook for 2016 by 10 percent to $48.5/mt from $44.2/mt.