Little movement in Chinese iron ore market

Friday, 25 November 2005 08:22:40 (GMT+3)   |  
       

Little movement in Chinese iron ore market

The Chinese iron ore market was steady this past week. Prices in the northeast China were unchanged as few transactions took place. In Shandong Province, market prices climbed ever so slightly after steelmakers moved to increase their procurement prices. Prices in other regions did not change much. Import prices at Tianjin Port and Beilun Port were somewhat weak, while the price at Qingdao Port was firm. By the end of trading on Thursday, November 24, the price of 66-percent damp base iron ore in Tangshan was RMB 520/mt ($64), excluding tax. The price of similar ore in Beipiao, Liaoning Province, was RMB 420/mt ($52), excluding tax. The above-mentioned prices were equal to those of the previous week. The price quotation of 63.5-percent India fine ore was unchanged at RMB 640/mt ($80) at Tianjin Port, and the price at Qingdao Port was RMB 630/mt ($78), also unchanged. The price of Peru 65-percent pellet at Beilun Port was RMB 880/mt ($110), equaling that of the prior week. With the exception of Shandong Province, the domestic market did not see many transactions. The demand in Shandong Province has been strong, as its growth rate of iron and steel output ranks second in China. A rise in steelmakers’ procurement prices pushed up the price of ore. Shandong Jinan Steel increased its procurement prices for concentrate by RMB 10/mt ($1) to RMB 770/mt ($95) on Tuesday, November 22. Though the price of imported iron ore at Qindao Port did not change much, it gained strength as inventory declined by 100’000 metric tons to hit 8.1 million metric tons. Not much change took place in northern China. Sources report that Shi Jiazhuang Steel plans to decrease its procurement prices for concentrate, a move the might impose pressures on the local market. Nevertheless, the current market had not yet responded to this move by any obvious measure. The cold weather in northeastern regions made it difficult for miners to produce iron ore. Plus, the softened market lowered miners’ enthusiasm to produce products. Therefore, many mines suspended their production. The cold weather also made delivery inconvenient, which affected the business transactions. Steelmakers’ production was normal, though they did not supplement inventory adequately during the winter storage period. Unsure of whether miners would increase their prices, steelmakers chose to purchase ore in small quantities on a batch basis. This suppressed the price increase and broke the continuity of production in steel mills. While Baosteel’s 2006 first quarter prices announced on Tuesday, November 22, influenced the price of cold rolled sheet/coil, the announcement had no influence on other products. This gave miners more confidence. Meanwhile, some subtle changes took place in the finished steel market. Rebar prices were in an upward trend, and medium plate prices might go up. The price of hot rolled sheet/coil fluctuated after the end of price decline, but cold rolled sheet/coil prices were in a downward trend. Changes in the finished steel market will have a positive influence on the iron ore market. Prices in the upcoming days are expected to be stable with slight fluctuations, and could even exhibit an upward trend. SteelOrbis Shanghai

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