Prices of ex-Australia iron ore of 62 percent Fe content for delivery to China's Qingdao port, which moved in the range of $59.5-62/mt CFR last week, have moved sideways since last Friday, starting the current week in the same price range. As of August 8, inventory of iron ore at 33 major Chinese ports amounted to 102.63 million mt, up 540,000 mt or 0.53 percent compared to the inventory level recorded on August 1, as announced by China's Xinhua News Agency.
Iron ore prices in China, which had fluctuated on an upward trend at the end of July against the backdrop of rainy weather conditions, started August with a rising movement under the influence of improved demand for finished steel in China, which resulted in increases in Chinese domestic finished steel prices. However, in the middle of last week, iron ore prices in China declined due to the slight downward movement recorded in the Chinese futures market. Coming to the start of the current week, iron ore prices have moved sideways.
On August 11, Jason Shenker, president of Texas-based Prestige Economics, stated that iron ore prices have gained support both from the weakness of the US dollar and the growth of the Chinese economy. Shenker predicts that iron ore prices will trend at $60/mt in the second half of 2016, which will cause the average iron ore price for 2016 to settle at $55/mt. A similar announcement was made by the Australia and New Zealand Banking Group (ANZ Group) which said, "With the outlook for demand better now than at the start of the year, the likelihood of iron ore dipping back to $50 is fast declining."