Over the past week, a significant price decline has been observed in quotations of iron ore imports for China, while the price trend for domestic ore has varied from sideways to slightly up. The market is fairly silent in terms of both supply and demand and market players express a lack of optimism on the market's future prospects. Currently, steel mills are cautious as regards purchases of iron ore.
Product Name | Specification | Average Price (RMB/mt) | Price ($/mt) | Weekly change (RMB/mt) |
Iron concentrate | damp base (iron content: 66 percent) | 900 | 132 | -30 |
India fine ore | 63.5 percent | 1,250 | 183 | -60 |
In the past week, international freight rates have turned around. On May 26, the Baltic Dry Index (BDI) closed at 4,209 points, up 406 points compared with last week. On May 26, the average freight charge from Brazil to Beilun port in China was $34.40/mt, up by $4.87/mt week on week. Meanwhile, the average freight rate from Western Australia to Beilun on the same day was $14.18/mt, up by $2.45/mt compared with May 20.
During the week in question, the Chinese domestic iron ore market has trended sideways to slight upward while the import iron ore market has continued to trend downward. At present, the price of 66 percent damp base iron ore in Tangshan, Hebei Province is at the level of RMB 900/mt ($132/mt, tax excluded), up RMB 30/mt ($4/mt) week on week, while the market prices in the northeastern region stand at RMB 760/mt ($111/mt, damp base/tax excluded), unchanged week on week. Meanwhile, the prices of 63.5 percent Indian fine ore have declined to $123/mt FOB, while the CFR price (Tianjin Port) is at $111/mt, both down $6/mt week on week. In addition, quotations of 63.5 percent Indian ore are down by RMB 60/mt ($9/mt) week on week to RMB 1,130-1,150/mt ($166-169/mt) at Chinese ports, while the deal price of 62.5 percent Australian PB fines has trended down by RMB 70/mt ($10/mt) week on week to RMB 1,160/mt ($170/mt), with the market price of 65 percent Brazilian fine ore down another RMB 80/mt ($12/mt) week on week to RMB 1,200/mt ($176/mt).
Currently most mills and traders in China lack optimism regarding the prospects for the iron ore import market and believe that import prices will continue their softening trend in June. Large-scale traders have been cautious in giving quotations and have concluded few deals, while smaller traders have started to sell their spot materials in a hurry as they need to bring in cash. It is heard that the transaction prices of some Indian fine ores have already declined to below RMB 1,100/mt ($161/mt).
In April, China imported 55.33 million mt of iron ore, down 6.25 percent month on month. During the first four months this year, China imported 210.32 million mt of iron ore, up 11.6 percent year on year.