SteelOrbis Shanghai
Over the past week, Chinese domestic ore prices have moved steadily up, with firm prices in the major markets and brisk commercial activity in imported ore. While inventory at the ports is declining, low grade ore has seen a slight increase.
On October 26, the price of 66-percent damp base
iron ore in Tangshan was at RMB 535/mt ($67.8) excluding 13 percent VAT, while that in Beipiao city of Liaoning Province was at RMB 425/mt ($53.9) excluding VAT. The price quotation of 63.5-percent
India fine ore is at RMB 640/mt ($81.1) at Tianjin Port, while the price at Qingdao Port is at RMB 630/mt ($79.8). The price of Australian Hamersley 62 and 63-percent fine ore at Beilun Port is at RMB 630/mt ($79.8), all equal to the level of the previous week.
In the northeastern region, prices of fine ore still moved at a high level. Over the past week, some steel mills lowered their purchase prices. However, the mines did not change their ex-factory prices, leading to
trading shrinkage in the local market.
As regards northern
China, prices remained stable. With the price hike by some steel mills over the past week, commercial activities saw a good performance.
Prices in the Shandong market increased slightly, mainly because mills had to raise their prices in order to compensate for their inventories. Moreover, supplies from northeastern and northern
China did not arrive at Shandong in large quantities. In this case, the decline in inventories at Qingdao, Rizhao and other ports boosted up the local market prices.
Prices of imported ore continue to be firm. With the growing
trading volume, inventories at ports are seeing a continuous fall. By the end of the previous week, the total inventory of
iron ore in
China's twenty-three major ports was at 41.14 million mt, down 850,000 mt week on week.
Quotations of Indian ore have stepped up. According to CCCMC, the FOB price of 63.5-percent Indian fine ore is at $53-54/mt, while the CFR price is at $72-73/mt and $71-72/mt.
In general, as long as imported ore does not see a sharp increase, the Chinese
iron ore market will maintain this steady upward trend.
However, the strong domestic demand and price trend will also create lots of difficulties for the Chinese mills at the 2007 international
iron ore negotiations.