Iron ore remains supported by continuing stimulus expectations, gradual decline in stocks

Import iron ore prices in China have indicated an increasing trend today, Thursday, July 20, while also moving up compared to the previous week, supported by rising futures prices, stable demand which leads to gradual declines in port stocks, and continuing expectations that China will announce more measures to support the economy and the property market in particular.  

Iron ore fines with 62 percent Fe content have increased by $2.25/mt today to $116.35/mt CFR. This level is $4.95/mt above that seen one week ago. Brazilian iron ore with 65 percent Fe has indicated a rise of $2.35/mt on July 20 to $130.25/mt CFR, while up $4.75/mt week on week, SteelOrbis has learned.  

17 deals for 358,300 mt in total have been concluded at the Corex platform, including 130,000 mt of 60.77 percent Jimblebar blended fines at RMB 830/mt ($116.1), for delivery at Jingtang port, and a deal for 4,000 mt of 60.83 percent lumps at RMB 930/mt ($130.1/mt), for delivery at Huanghua port. But, in general, trading activity has been slower than earlier this week.  

During the given week, import iron ore prices in the Chinese market moved up amid increasing ferrous metal futures prices. However, demand for steel has been slack, exerting a negative impact on the iron ore market. Inventory of iron ore has decreased, providing certain support for prices. Last week, port stocks of iron ore fell by around 1.1 percent, while this week the tendency has continued. Even higher export volumes reported by major Australian companies these days have not resulted in much worsening of the mood, as most of the rises are due to higher iron ore consumption and the increase in crude steel production in China in H1.  

It is expected that iron ore prices will likely fluctuate within a limited range at the current high levels in the coming week.    

Iron ore futures prices at Dalian Commodity Exchange have risen by 1.74 percent to RMB 849/mt ($118.8/mt) compared to the previous trading day (July 19), while increasing by 2.35 percent compared to July 13.   

As of Thursday, July 20, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,784/mt ($529/mt), rising by RMB 57/mt ($8/mt) or up 1.53 percent since July 13, while increasing by 1.37 percent compared to the previous trading day (July 19).  

Imported iron ore prices in China (week-on-week basis)   

Price includes VAT.   

Nationwide iron ore concentrate prices (66 percent Fe)

Price includes VAT.   

$1 = RMB 7.1466