Business activity in the Chinese iron ore market has increased considerably in the last week of July compared to the middle of the month, which has impacted raw material prices too. However, it is as yet unknown whether the prices will grow further or it is just a small upturn before the slowdown.
For reference, the market situation had been not quite favourable for the past three months amid low demand. Most steelmakers were able to hold back from purchases having sufficient stocks. At the moment, the number of orders for Indian material has risen and market participants think it is solely because mills need to re-stock. The demand in spot market has surged due to high long-term prices for the material among other reasons.
The most recent bookings of Indian 63.5% Fe ore have been made at $137-139/t c&f ($116-117/t fob). Offer prices are varying in the range $139-141/t c&f. For reference, the supply remains tight at present.
Prices for Brazilian and Australian material are only nominal. Thus, Brazilian iron ore is quoted at $138-141/t c&f ($124-126/t fob), by $6-8/t up from last week. Australian 61.5-62% Fe ore fines are estimated at $131-134/t c&f ($125-129/t fob), by $5-8/t higher than last week.
Some traders forecast the prices will stay at the current levels at the beginning of August and the demand will remain rather firm. Other market participants, in their turn, expect price reductions and consider the growth as a small correction caused by limited supply which will be over after mills replenish stocks. As there are no serious improvements in the finished product market, the latter opinion looks more probable.
(Source: www.metalexperts-group.com )