As of May 26, inventory of iron ore at 33 major Chinese ports amounted to 114.82 million mt, up 1.95 million mt or 1.73 percent compared to the inventory level recorded on May 19, as announced by China's Xinhua News Agency.
As of the same date, the Xinhua-China Iron Ore Price Index for imported iron ore with 62 percent iron content was at 98 points, down two points from one week earlier. Meanwhile, the Xinhua-China Iron Ore Price Index for imported iron ore with 58 percent iron content was at 84 points on the date in question, down three points week on week.
During the given week, iron ore prices in China have seen an overall downward movement, with prices of imported iron ore declining below $100/mt, while transaction activity for imported iron ore has seen some improvement, with a slack transaction performance observed for domestic iron ore. Iron ore futures at Dalian Commodity Exchange fell to a new low during the week in question. Market participants state that, when prices dropped below $100/mt, purchasing activities by downstream users picked up somewhat compared to before. However, the lack of any considerable improvement in demand will prevent imported iron ore prices from indicating a significant rise.
Although Chinese domestic production of iron ore will likely be curbed due to weak cost competitiveness with imported iron ore, imported iron ore supply is expected to remain on a strong growth trend, thereby resulting in high iron ore supply in the Chinese market. Nevertheless, with imported iron ore prices having already indicated large decreases, it is thought that the price trend for imported iron ore will start to move sideways during the coming period.
