The price of 62% Fe grade iron ore fines from Australia delivered to China rose by US$0.5, reaching US$105.35 last Friday (December 26). The price remained at the over US$105 level even as the overall week ended with a marginal loss of 0.14%.

This recovery last Friday was due to a stronger Chinese Yuan and increased liquidity injections by China’s central bank. Besides, reduced shipping volumes from Australia and Brazil tightened supply, helping the iron ore price offset weakness in the steel market.

However, high port inventories and lower daily molten iron output, now below 2.27 million tons, limit further growth. With Chinese steel mills cutting production during the slow season, demand remains cautious. Market participants expect a volatile, range-bound trend as the market balances thin supplies against sluggish winter consumption.