China's iron ore market has been characterized by a small upward trend in the past week. Due to uncertainty in the domestic steel market, players in the domestic iron ore market are unsure about the likely trend of the market in the future.
Product name | Specification | Average price (RMB/mt) | Price ($/mt) | Weekly change (RMB/mt) |
Iron concentrate | damp base (iron content: 66 percent) | 940 | 139 | +20 |
India fine ore | 63.5 percent | 1,180 | 174 | +20 |
In the past week international freight rates generally continued to rise. On August 19, the Baltic Dry Index (BDI) closed at 2,644 points, up 207 points compared with last week. On the same day, the average freight charge from Brazil to Beilun port in China was $27.19/mt, up by $0.67/mt week on week. Meanwhile, the average freight rate from Western Australia to Beilun on the same date was $10.47/mt, slightly down by $0.13/mt compared with the level in the previous week.
Over the past week prices of iron ore in China have risen sightly. At present, the price of 66 percent damp base iron ore in Tangshan, Hebei Province is at the level of RMB 940/mt ($139/mt, tax excluded), while the market prices in the northeastern region stand at around RMB 830/mt ($122/mt, damp base/tax excluded), up by RMB 20/mt ($3/mt) week on week. Meanwhile, quotations of 63.5 percent Indian fine ore are at $138/mt FOB, while the CFR price (Tianjin Port) is at $158/mt, up $6/mt compared with a week ago. Current mainstream quotations of 63.5 percent Indian ore at domestic ports are standing at RMB 1,180/mt ($174/mt), up by RMB 20/mt ($3/mt) week on week. Meanwhile, the deal price of 62.5 percent Australian PB fines is RMB 1,170/mt ($165/mt), with the market price of 65 percent Brazilian fine ore at RMB 1,260/mt ($186/mt), rising by RMB 10/mt ($1/mt) week on week.
During the past week, transaction activity in China for imported iron ore has not been so good, despite the rise in inquiries. China's domestic large scale steel mills lately issued their ex-works prices for September production, announcing increases which were lower than what had been expected. At the same time, since downstream demand in the domestic steel markets is not so favorable, the steel mills are cautious about purchasing iron ore.
As regards the local market, prices of iron ore concentrate have been on an overall rising trend, with good levels of inquiries in the market. Meanwhile, due to insufficient supplies, miners are unwilling to sell material unless they receive a favorable price.