CANBERRA: Iron ore prices are likely to come under downward pressure into the fourth quarter on increased seaborne shipments and lower steel demand in China, Macquarie said Tuesday.
Iron ore exports from Australia and Brazil are running at high levels currently with Australian shipments at a 850 million mt/year level or around the end-June record high, the bank’s analysts said. “After a sequential dip through mid-July and August, Australian iron ore exports have recovered strongly over the past few weeks, preliminary port data shows,” they said.
“Assuming this operational performance can be sustained and that steel demand conditions will weaken sequentially (as seasonality should dictate), the iron ore price is likely to come under pressure once again.”
Iron ore prices Monday slipped for the first time this month, with Platts IODEX 62% Fe benchmark fines assessed at $58/dry mt CFR China, down $1.25/dmt from Friday’s close. The rebound in shipments shows improved operational performance across the major producers in the Pilbara, they said.
“Brazilian iron ore exports have also seen a bounce following port maintenance in August, and they too are now running around record highs on a three-week moving average basis,” the analysts said.
