Prices of ex-Australia iron ore of 62 percent Fe content for delivery to China's Qingdao port, which moved in the range of $55.5-59/mt CFR last week, have decreased by an average of $1.5/mt since last Friday, starting the current week at $56.5-57/mt CFR China.
At the beginning of July, iron ore prices in China indicated a fluctuating trend, while last week they increased by 5.5 percent. The increases recorded in semi-finished and finished steel quotations in China are believed to be the reason for this upward movement in iron ore quotations. Semi-finished and finished steel prices in China increased on July 12 due to the positive sentiment generated after the rises seen in China's futures exchange market on July 11. As a result, not only did iron ore quotations increase last week, but scrap and coal prices also moved up.
Even though iron ore quotations in China moved up at the beginning of last week, they indicated a slight fall toward the end of the week and then remained stable, followed by a downward movement today, July 18. Market sources state that the rises seen in iron ore prices from time to time have been short-lived, while they are expecting iron ore prices to fall further. Charles Bradford, president of Bradford Research, stated last week that the increases recorded in iron ore quotations might have been triggered by speculative purchases at Dalian Commodity Exchange or due to the elections held in Japan on July 10 which might have caused an expectation of a rise in iron ore purchases. Bradford's prediction that the upward movement in iron ore prices will be short-lived has materialized during the past week, while his expectation of a significant rise in the global iron ore market in the coming months has attracted attention.
Meanwhile, iron ore prices in China are expected to move on a downward trend in the second half of 2016 amid the ongoing oversupply problem in the global iron ore market and due to the weak demand conditions.