As of September 6, 62% Fe iron ore originating from Australia rose by USD 0.65 to USD 91.1 on CFR China basis. Despite the difficulties in the Chinese steel market, the continued decline in steel inventories and the recovery in production activity supported the rise in iron ore prices.
According to the latest data, the blast furnace operating rate in China increased by 1.22% last week to 77.63%. Daily hot metal production increased to an average of 2.23 million tons, indicating an increase of 17,200 tons compared to the previous week. This increase in production was among the factors that accelerated the recovery in iron ore prices.
Moreover, news that the Chinese government plans to cut interest rates on existing mortgages in a bid to stimulate consumption has strengthened expectations that it could provide additional support to iron ore prices. However, market experts alert that the recovery remains slow despite some Chinese steel mills restarting production. Steel prices have yet to stabilize and peak season demand remains uncertain.
Iron ore prices are likely to remain volatile in the short term.
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