Prices of ex-Australia iron ore of 62 percent Fe content for delivery to China’s Qingdao port, which began last week at $55/mt CFR China, closed the week at $56.5/mt CFR. At the beginning of the current week, iron ore prices are standing at $56/mt CFR China. The most important factor in the upward trend of import iron ore prices in China during the past week has been the reduction of supplies in the Chinese finished steel market amid maintenance work being carried out by Chinese steelmakers , which has eased the imbalance between supply and demand in the market in question, as indicated in a statement issued by the China Iron and Steel Association (CISA). Besides, the Chinese government is expected to limit steel production in some regions in the coming period against the backdrop of events such as the World Athletics Championship to be held in Beijing in late August and commemoration in early September of China’s victory over the Japanese in World War II.
Swiss-based global financial services company UBS Group has stated that Chinese steel producers are seeking to increase their iron ore inventories before the government imposes production restrictions and this may be another reason for the uptrend of iron ore prices. Even if iron ore prices are expected to increase in the near term, market players mostly consider that the uptrend of ore prices will be temporary. Also, Australian iron ore giant Rio Tinto has stated that the downward pressure on prices from high supplies will increase in the coming period.
Meanwhile, in July this year China imported 86.10 million mt of iron ore , up 14.9 percent compared to June, as announced by the Chinese customs authorities. Meanwhile, in the January-July period of the current year, China’s imports of iron ore totaled 538.92 million mt, almost stable as compared with the same period of last year.