Last week iron ore prices continued to move higher, especially during the first part of the week. Iron ore prices have been driven higher by a tight market for medium grade fines, but prices could be sustained by mills seeking to maintain output through the autumn.

On Wednesday, the Kallanish KORE 62% Fe index gained another $2.45/ to $128.95/dry metric tonne cfr Qingdao, the highest since January 2014. The Kallanish KORE 65% Fe index gained $0.74/t to $134.79/dmt cfr, and the KORE 58% Fe index increased $2.37/t to $113.35/dmt cfr.

On the same day, on the Dalian Commodity Exchange January 2021 iron ore settled up CNY 10.5/t at CNY 860/t, despite losing ground during the day. On the Singapore Exchange September 62% Fe futures settled up $0.59/t at $124.30/t. The same contract for 65% Fe and 58% Fe futures meanwhile settled up $2.05/t at $134.16/t, and up $0.75/t at $108.07/t respectively.

Iron ore inventories are still supporting prices even though steelmaking margins have been put under severe pressure by the recent price hike. A shortage in medium grade fines is pushing up prices to levels where mills could consider reducing buying.

After reaching the new record level on Wednesday, prices of iron ore corrected somewhat the days after. The drop came despite data confirming that iron ore port stocks have begun to decline again. Across 34 ports, iron ore stocks were down 1.23 million tonnes last week at 104.99mt, according to a count by SMM. A very slight decrease in shipments from ports was outweighed by slower arrivals of material into ports. After futures prices slumped, traders began negotiating discounts leading spot prices to fall also.