Iron ore prices remain stable in the absence of Chinese buyers

Monday, 19 February 2018 15:54:07 (GMT+3)   |   Istanbul
       

Following their mostly upward movement last week, prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port have remained stable on Monday, February 19, as compared to Friday's closing price, starting the current week unchanged at $77.77-78.42/mt CFR China. As Chinese steel producers made iron ore purchases in order to replenish their stocks before the Chinese New Year holiday (February 15-21), stockpiles of imported iron ore at Chinese ports are still high. 

Last week, before entering the Chinese New Year holiday period, trading activity for iron ore was quiet in China. However, the upward trend of the Chinese iron ore futures market provided support for prices in the domestic spot market. Expectations of a recovery in the Chinese steel market as steel production in the country is foreseen to increase beginning from the month of March caused some Chinese steel mills to conclude bookings of iron ore in order to replenish their stocks. Meanwhile, demand for imported iron ore in China increased as a result of the depreciation of the US dollar against the Chinese currency, providing support for the upward movement of iron ore prices. As a result, spot iron ore prices in China increased by a total of 1.81 percent last week, regaining mid-January levels.

Although the Chinese New Year holiday will end on Wednesday, February 21, trading activity in Chinese iron ore market is not expected to recover immediately. Meanwhile, market players are wondering what will be the effects of the US Department of Commerce’s recommendations for strong steel tariffs or quotas under Section 232, which have been presented to President Donald Trump. As for global iron ore prices, they are expected to move in line with the Chinese iron ore futures market. 


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