Iron ore offers to China had been trending downwards since the beginning of July due to the slowing Chinese economy and amid excess supply. After the Chinese government's announcement of measures to support the country's economy, iron ore prices increased by four percent on October 13 - the biggest single-day increase seen since March this year. According to market sources, the return of buyers to the market after the Chinese National Day Holiday (October 1-7) and the acceleration of their purchases constitute the second reason for the increase in iron ore prices.
As of October 13, ex-Australia 61.5 percent Fe content iron ore offers to China have increased by $3/mt compared to previous week to $83/mt CFR China. As of the same date, ex-India 63.5 percent Fe content iron ore offers to China increased to $84-85/mt CFR China, indicating a rise of $3/mt over the past week.
Market sources have stated that the growth of the Chinese economy has been slow for a while now and is unlikely to improve in the short run and so the improvement in iron ore prices may be just temporary. Indeed, today, October 16 ,iron ore offers to China have declined by $3/mt, with ex-Australia 61.5 percent Fe content iron ore offers to China now at $80/mt CFR China. In the coming period, the trend of iron ore prices is expected to become clearer depending on the situation regarding both demand and the Chinese economy.