China's domestic iron ore market continued to see a slight rise in prices of both domestic ore and imported ore over the past week. Although the soaring freight rates may push up domestic iron ore prices in the short term, strong downward pressure still appears to exist for the future as the finished steel market and freight market are both likely to go down.
Product name | Specification | Average price(RMB/mt) | Price($/mt) | Weekly change (RMB/mt) |
Iron ore concentrate | damp base (iron content: 66 percent) | 560 | 82 | 20 |
India fine ore | 63.5 percent | 590 | 86 | - |
The international shipping freight market again picked up in the past week after its previous correction. On June 18, the Baltic Dry Index (BDI) closed at 4,073 points, up 621 points compared with the level one week earlier on June 11. On June 18, the average freight charge from Brazil to Beilun Port in China was $47.85/mt, up by $9.72/mt week on week. Meanwhile, the average freight rate from Western Australia to Beilun on June 18 was $20.76/mt, up $4.28/mt week on week. In addition, the freight cost of Indian ore to China's major ports on June 18 was at $16.17/mt, a slight rise of $0.75/mt compared with the level on June 11.
The Chinese iron ore market in general has seen steady upward movement in recent days. At present, the price of 66 percent damp base iron ore in Tangshan, Hebei Province is up by RMB 20/mt ($3/mt) week on week to the level of RMB 560/mt ($82/mt, tax excluded), while the market prices in the northeastern regions are unchanged at RMB 460/mt ($67/mt, damp base/tax excluded). Meanwhile, the prices of 63.5 percent Indian fine ore are at $59/mt FOB, while the CIF price (Tianjin Port) is up slightly up to $76/mt. Additionally, the price quotation of 63.5 percent Indian ore has increased by RMB 10/mt ($1/mt) and is now at RMB 590-600/mt ($86-87/mt) at Chinese ports, while the deal price of 62.5 percent Australian PB fines has remained at RMB 600/mt ($88/mt), with the market price of 65 percent Brazilian fine ore again up RMB 10/mt ($1/mt) to around RMB 660/mt ($97/mt).
As a result of the continuous increase in shipping freight charges, import quotations have been going up steadily in recent days, and now appear almost equal to the iron ore contract prices. Most domestic traders have lost interest in high-priced materials, and so the trading volume of import materials has begun to drop considerably. Meanwhile, facing growing cost pressure, the Chinese mills currently tend to make less purchases, and prefer to stand aside and wait to see future developments in the market.