The downtrend of iron ore prices in the Chinese market is expected to continue in the third quarter this year, according to a report issued by Standard Chartered Bank on May 29. Due to earlier declines in iron ore prices than expected, Standard Chartered Bank has reduced its iron ore price predictions for the Chinese market to $124/mt and $112/mt for the second and third quarters of the current year respectively, down from the previous forecasts of $140/mt and $133/mt.
Standard Chartered Bank had previously predicted that the Chinese iron ore market would witness a downtrend from June due to the traditional seasonal lull. However, iron ore prices declined earlier than expected due to weak economic growth and improved market supply.
"With the reduced production of Chinese mills from June, we expect the decline of iron ore prices to continue to the third quarter of this year," stated Zhu Hui, analyst in the research department of Standard Chartered Bank.
The anticipated improvement in the Chinese economy in the second half of this year is expected to bring support for steel demand after September, according to Wang Zhihong, director of the bank's China research department.
