Prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port, which moved in the range of $55.5-56.95/mt CFR last week, have trended sideways since last Friday, starting the current week at $56.45-56.95/mt CFR China. As of September 19, inventory of iron ore at 33 major Chinese ports amounted to 95.53 million mt, down 2.15 million mt or 2.2 percent compared to the inventory level recorded on September 12, as announced by China's Xinhua News Agency.
Last week, iron ore prices, which started the week with a sideways movement and switched to a downtrend soon afterwards, increased slightly in mid-week due to the uptrend in the Chinese steel futures market resulting from the official approval of the merger of leading Chinese steel producers Baosteel Group and Wuhan Iron and Steel Group (WISCO). For the current week, iron ore bookings in China are expected to increase before the Chinese National Day Holiday on October 1-7, and so inventories of iron ore at Chinese ports are expected to decline slightly. Meanwhile, restrictions on crude steel production at Chinese mills will be eased with the end of the International Horticultural Exposition in Tangshan on October 16 and this situation is expected to increase iron ore demand in China, reducing the downward pressure on iron ore prices to a certain extent.
As SteelOrbis stated last week, according to a poll of analysts published by Reuters, the forecast for the average iron ore price in 2016 is at $50.9/mt. Meanwhile, investment bank Morgan Stanley revised its latest outlook regarding the iron ore market in the middle of last week. Accordingly, analysts at Morgan Stanley have increased their predictions. The bank is now forecasting an aveage iron ore price of $47.50/mt for the calendar year 2016, up from an earlier estimate of $43.80/mt, and keeping its estimates steady for 2017, at $47.50/mt, and for 2018, at $52.50/mt.