Boosted by the price increases made by some large-scale local iron ore traders, China's domestic iron ore market registered an overall minor upward movement over the past week, with a certain rise observed in the market trading volume. However, given the still declining price levels in the domestic finished steel market, it is hard for China's iron ore market to register sufficient levels of demand, and so the upward trend of the past week is unlikely to continue into the future.
Product name | Specification | Average price(RMB/mt) | Price ($/mt) | Weekly change (RMB/mt) |
Iron ore concentrate | damp base (iron content: 66 percent) | 570 | 83 | - |
India fine ore | 63.5 percent | 680 | 100 | +30 |
The international shipping freight market again slipped down slightly on a fluctuating trend during the past week. On September 16, the Baltic Dry Index (BDI) closed at 2,415 points, down 47 points compared with the level on September 9. On September 16, the average freight charge from Brazil to Beilun Port in China was $25.81/mt, down by $3.07/mt week on week. Meanwhile, the average freight rate from Western Australia to Beilun on September 16 was $9.46/mt, a slip of $0.72/mt week on week.
The iron ore market in China has posted a minor climb over the past week, accompanied by improved commercial activity. At present, the price of 66 percent damp base iron ore in Tangshan, Hebei Province is at the level of RMB 570/mt ($83/mt, tax excluded), while the market prices in the northeastern regions stand at RMB 490/mt ($72/mt, damp base/tax excluded), both neutral week on week. Meanwhile, the prices of 63.5 percent Indian fine ore have climbed up by $2/mt to $65/mt FOB, while the CFR price (Tianjin Port) has gone up by $1-2/mt week on week to $81-83/mt. Additionally, the price quotation of 63.5 percent Indian ore has jumped up by RMB 30/mt ($4/mt) week on week and is now at RMB 680/mt ($100/mt) at Chinese ports, while the deal price of 62.5 percent Australian PB fines has risen by RMB 30/mt ($4/mt) to RMB 690/mt ($101/mt), with the market price of 65 percent Brazilian fine ore up by RMB 30/mt ($4/mt) to RMB 720/mt ($106/mt).
As a result of the improved trading performance in the Chinese iron ore market, some sellers slightly hiked their quotations in the past week. At the beginning of the past week, some large-scale local iron ore traders announced they were raising their prices of 63.5 percent Indian fine ore to RMB 730/mt ($107/mt). These increases were followed by successive hikes made by traders at various ports to their spot ore prices. As a result, actual deal prices have risen by RMB 30/mt ($4/mt) from the previous week. Generally speaking, the climbing movement in the past week has mainly been due to the concentrated purchased made by Chinese mills for stockpiling purposes ahead of the National Day holidays. However, with most industry insiders believing that downward room is still available for steel prices in the near future, the iron ore market seems unlikely to maintain its rising trend if steel prices continue to go down. In addition, with a great deal of high-priced materials currently in hand, some large-scale traders prefer to stand aside from market trading for the moment, thereby contributing to a certain extent to the relatively tight availability of supply.