Prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port have moved up by $1.9/mt on Monday, August 21, compared to last Friday, starting the current week at $79.45-80.15/mt CFR China. As of August 14, inventory of iron ore at 33 major Chinese ports amounted to 116.95 million mt, down 1.31 million mt or 1.11 percent compared to the inventory level recorded on August 7, as announced by China's Xinhua News Agency.
Following the statements made by the China Iron and Steel Association (CISA) on Friday, August 11, global iron ore prices began last week (starting on Monday, August 14) with declines and maintained their downward trend until the close of business on Thursday. However, the Chinese steel futures market started to recover on Thursday, which prompted global iron ore prices to switch to an upward trend. Even so, the declines in iron ore prices recorded last week exceeded the increases, with iron ore prices declining by an overall margin of one percent during the given week.
Meanwhile, Dalian Commodities Exchange on Friday, August 18, said it will limit the daily purchases and sales of iron ore contracts for delivery in January and February to 6,000 lots as of Tuesday this week. Each lot consists of 100 metric tons of iron ore. Meanwhile, Chinese mills have accelerated steel production with high-grade iron ore ahead of production curbs that are set to start before winter. Under these circumstances, the Chinese steel futures market has begun the current week with an upward trend, which has prompted global iron ore prices to increase also.
Considering the mandatory productions cuts that will be implemented in China in the short term, market sources expect that semi-finished and finished steel prices in the local Chinese market will remain strong and thereby provide support for global iron ore prices.