Iron ore up $2.5/t, but trading slows down
Iron ore prices moved up on Thursday amid some bullish expectations in the market caused with the recently announced economic data on Q2. However, iron ore consumption is likely to be reduced in the near future. Trading is in lull after the price increase.
Australian fines 62% Fe added $2.5/t over the day reaching $218.75/t CFR China on July 15. The move followed RMB 14.5 ($2.7/t) uptick of futures on the DCE.
The market sentiment was somewhat better after GDP growth in Q2 was announced at 7.9%. Although it was below expectations of 8.2%, the number looks quite healthy for most market insiders.
Besides, some analysts predict the central government will roll out more economic stimuli to achieve targets in Q3-4, as the Q2 result appeared to be behind the goal.
However, steel production is likely to slow down in the near future, as the government aims to keep the crude steel output below 1.065 billion this year (last year result). Taking into account a sharp rise of volumes in H1, steel mills are likely to be ordered to drop utilization rates dramatically.