Over the past week, the import iron ore market in China has continued to be sluggish, with few deals concluded. Given the production cutbacks and stoppages at steel mills, the resulting decreased demand for iron ore may lead to a further decline in market prices of imported iron ore. Meanwhile, prices of domestic iron ore have indicated a rebound.
Product name | Specification | Average price (RMB/mt) | Price ($/mt) | Weekly change (RMB/mt) |
Iron concentrate | damp base (iron content: 66 percent) | 830 | 122 | 50 |
India fine ore | 63.5 percent | 980 | 145 | -20 |
In the past week, international freight rates have continued to slide down. On July 15, the Baltic Dry Index (BDI) closed at 1,700 points, down 240 points compared with last week. On the same day, the average freight charge from Brazil to Beilun port in China was $15.6/mt, down by $1.59/mt week on week. Meanwhile, the average freight rate from Western Australia to Beilun on the same date was $6.01/mt, down by $1.43/mt compared with July 8.
Over the past week, prices of domestic iron ore saw a rebound while quotations of imported iron ore continued to trend down. At present, the price of 66 percent damp base iron ore in Tangshan, Hebei Province is at the level of RMB 830/mt ($122/mt, tax excluded), up RMB 30-50/mt ($4-7/mt) week on week, while the market prices in the northeastern region stand at RMB 720/mt ($106/mt, damp base/tax excluded), up RMB 80/mt ($12/mt) week on week. Meanwhile, the prices of 63.5 percent Indian fine ore are at $105/mt FOB, while the CFR price (Tianjin Port) is at $124/mt, down $6/mt compared with a week ago. In addition, mainstream quotations of 63.5 percent Indian ore are at RMB 980/mt ($145/mt) at Chinese ports, down RMB 20/mt ($3/mt) week on week; meanwhile, the deal price of 62.5 percent Australian PB fines is at RMB 1,020/mt ($150/mt), down RMB 20/mt ($3/mt) with the market price of 65 percent Brazilian fine ore at RMB 1,080/mt ($159/mt), down RMB 10/mt ($1/mt) week on week.
Over the week in question, the quotations of Indian and Australian iron ores have trended down significantly, with few deals being concluded. Currently, the quotations of Indian iron ore are down to $120/mt CFR. Looking at the present situation, most miners lack optimism on the prospects of the market, with some of them selling off their materials at lower prices.
Currently, most domestic steel mills are incurring losses. Given the decreased profits of the mills, medium- and small-sized steel mills have reduced or halted their production while large-sized mills have chosen to arrange overhauling works. Meanwhile, the average daily crude steel output in China for June dropped down to 1.79 million mt, compared with a daily average of 1.847 million mt for the month of April, according to China's National Bureau of Statistics.
Over the past week, domestic iron ore concentrate has posted a price increase in some regions in China, mainly due to the turnaround in semis price in Hebei Province, as well as the fact that some smaller sized mills concluded purchases of domestic iron ore. However, given the sluggishness in the domestic steel market, it is thought that the prices of semis and iron ore concentrate may drop back in the near future.