China's iron ore market shows strong performance

SteelOrbis Shanghai Over the past week, the Chinese iron ore market saw brisk commercial activity, while there was a slight decline recorded in imported ore inventory. The steady price movement indicated a strong market performance. On September 28, the price of 66 percent damp base iron ore in Tangshan increased RMB 5/mt ($0.6) week on week to RMB 515/mt ($65.3) excluding tax, while that in Beipiao city of Liaoning province remained stable at RMB 420/mt ($52.9) excluding tax. The price quotation of 63.5 percent India fine ore is at RMB 640/mt ($81.1) at Tianjin Port, and the price at Qingdao Port is at RMB 630/mt ($79.8). The price of ex-Hamersley, Australia 63 and 64-percent fine ore at Beilun Port is at RMB 620/mt ($78.6). These ex-India and Australia prices are equal to the levels of the previous week. The prices of iron ore in the northeastern market remained stable with good commercial activity in evidence. Steel mills located in northern and eastern China were active in making purchases in this regional market, thus leading to the tight supply there. In northern China, supply is in obvious shortage. The mines in the Hanxing region were not in normal production, which forced the local steel mills to make purchases in other regions. Furthermore, the mills which had low purchase prices in earlier times again hiked their prices. However, because of the decline in semi finished steel prices in recent days, steel mills are cautious about the future, and thus the market in northern China did not rise as much as expected. The frequent arrivals of imported ore at the ports meant that price quotations did not rise. On September 22, the total inventory of iron ore in China's twenty-three major ports was at 41.55 million mt, down 500,000 mt week on week. Influenced by the decrease in freight, the CFR price of Indian ore dropped about $1/mt last week. According to China Chamber of Commerce of Chemicals, Metals and Minerals Importers and Exporters (CCCMC), the FOB price of 63.5 percent ex-India fine ore remained at $53-54/mt in week 39. However the CFR price in week 38 was at $72-73/mt and at $71-72/mt in week 39. Based on the present market situation, the iron ore market is performing strongly. If the quantity of imported ore arriving at the ports reduces, then iron ore prices may climb slightly in the coming week.