SteelOrbis Shanghai
The continuous and large-scale stock-building for the winter by mills in the northeastern regions finally boosted up
iron ore prices over the past week. Due to the tight supply, the
iron ore market prices in the northeastern and northern regions inevitably soared. Prices of imported ore also saw increases due to the declining inventory at the ports.
By the end of
trading on November 2, the price of 66-percent damp base
iron ore in Tangshan was up RMB 25/mt ($3.2) to RMB 560/mt ($71.2) (tax excluded), while its price in Beipiao Liaoning Province was up RMB 25/mt ($3.2) to RMB 450/mt ($57.2) (tax excluded). The price quotation of 63.5-percent
India fine ore is at RMB 640/mt ($81.3) at Tianjin Port, while the price at Qingdao Port is at RMB 630/mt ($80.1). The price of Australian Hamersley 62- and 63-percent fine ore at Beilun Port is at RMB 630/mt ($80.1). All these latter prices are equal to the levels of the previous week.
The demand of the steel mills in the northeastern region grew due to increased
production in the context of winter stock-building efforts. Meanwhile, the mines are optimistic about the future and have thus raised their quotations by a large margin. Nevertheless, according to the market players, following the sharp rise, the prices of
iron ore in this region are much higher than those of imported ore. So, if import prices do not go up in the future, then local prices are unlikely to see a further increase, and we will probably just see a trend of slight fluctuation at a high level.
Just as in the northeastern region, the northern
China market also jumped up sharply. With tight supply and low inventory, many local steel mills are eager to make purchases, thus driving up the market prices.
Furthermore, the market in eastern
China climbed up slightly, while a steady price trend was observed in northwestern and central
China.
As regards imported ore, prices showed stable movement while traders hiked their quotations. By the end of the previous week, the total inventory of
iron ore in
China's twenty-three major ports amounted to 40.77 million mt, down 370,000 mt week on week.
According to the
China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters (CCCMC), the FOB price of 63.5-percent Indian ore is at $53-54/mt while the CFR price is at $72-73/mt and $72-73/mt, neutral week on week.
All in all, according to the current situation, there is not much momentum for domestic ore prices to show any further upward movement, especially in northeastern and northern
China. Right now, the critical point of interest is whether imported ore will see an overall increase and thus give a boost to domestic ore. If inventory at the ports declines to a level below 40 million mt in the upcoming period, then the imported ore market may provide the spark for another price rising tendency.