Last week the Chinese domestic iron ore market continued its upward trend, in line with the continuous price increases observed in the Indian spot iron ore markets, which had risen to $163/mt CFR or even $170/mt CFR from some Indian iron ore mines by the end of the week. The price increases in iron ore import offers were a major factor in helping to push up domestic iron ore prices.
Product Name | Specification | Average Price (RMB/mt) | Price ($/mt) | Weekly change (RMB/mt) |
Iron concentrate | damp base (iron content: 66 percent) | 960 | 141 | +60 |
India fine ore | 63.5 percent | 1,180 | 173 | +40 |
Last week, the international shipping freight market continued its downward trend, while the freight rate from Brazil to China posted a slight decrease. On April 1, the Baltic Dry Index (BDI) closed at 2,998 points, down 179 points compared with last week. On April 1, the average freight charge from Brazil to Beilun port in China was $26.94/mt, up $3.23/mt week on week. Meanwhile, the average freight rate from Western Australia to Beilun on April 1 was $10.50/mt, down by $0.52/mt compared with March 25.
Over the week in question, a continuous price increase was observed in the Chinese iron ore market. At the end of last week, the price of 66 percent damp base iron ore in Tangshan, Hebei Province was at the level of RMB 960/mt ($141/mt, tax excluded), while the market prices in the northeastern regions stood at RMB 850/mt ($124/mt, damp base/tax excluded), both up by RMB 50-60/mt ($7-8/mt) week on week. Meanwhile, the prices of 63.5 percent Indian fine ore had risen to $135-140/mt FOB, while the CFR price (Tianjin Port) was at $160-163/mt, both increasing by $8/mt week on week. In addition, quotations of 63.5 percent Indian ore were up by RMB 40/mt ($6/mt) to RMB 1,180/mt ($173/mt) at Chinese ports at the end of last week, while the deal price of 62.5 percent Australian PB fines was at RMB 1,170/mt ($172/mt), up by RMB 20/mt ($3/mt) week on week, with the market price of 65 percent Brazilian fine ore up by RMB 50/mt ($7/mt) compared to the previous week to RMB 1,240/mt ($182/mt).
With the continuous price increase seen in the Chinese iron ore market, domestic ore traders halted their sales in expectation of further price increases. By the end of last week, some quotations of Brazilian iron ore for China had increased to $170/mt CFR, while the accepted price for Chinese steelmakers and traders remained at $160/mt CFR.
A slight fluctuation has been observed recently in the domestic steel market, including price decreases in finished steel and semis, which may have a negative effect on the Chinese iron ore market in the near future. However, market players believe that, though the momentum for price increases observed in the Chinese iron ore market may slow down, domestic prices of iron ore are unlikely to drop down in the short term.