With the continuous drop of domestic steel prices, iron ore prices in the Chinese market have declined significantly in recent days. Some steel mills have started to reduce their purchase volumes of iron ore and to lower their iron ore purchasing prices, given that they have been incurring losses. China's domestic iron ore market is expected to maintain its declining trend in the short term.
Product name | Specification | Average price (RMB/mt) | Price ($/mt) | Weekly change (RMB/mt) |
Iron concentrate
| damp base (iron content: 66 percent) | 780 | 115 | - |
India fine ore | 63.5 percent | 1,000 | 147 | -90 |
On July 8, the Baltic Dry Index (BDI) closed at 1,940 points, down 411 points compared with last week. On the same day, the average freight charge from Brazil to Beilun port in China was $17.19/mt, down by $4.7/mt week on week. Meanwhile, the average freight rate from Western Australia to Beilun on the same date was $7.44/mt, down by $0.97/mt compared with last week.
During the week in question, quotations of iron ore in the Chinese market continued their downward trend. At present, the price of 66 percent damp base iron ore in Tangshan, Hebei Province is in the range of RMB 780-800/mt ($115-118/mt, tax excluded), up slightly week on week, while the market prices in the northeastern region stood at RMB 640/mt ($94/mt, damp base/tax excluded), down RMB 40/mt ($6/mt) week on week. Meanwhile, the prices of 63.5 percent Indian fine ore have been at $112/mt FOB, while the CFR price (Tianjin Port) is at $130/mt, down $12/mt compared with a week ago. In addition, mainstream quotations of 63.5 percent Indian ore are at RMB 1,000/mt ($147/mt) at Chinese ports, down RMB 100/mt ($15/mt) week on week; meanwhile, the deal price of 62.5 percent Australian PB fines is at RMB 1,040/mt ($153/mt), down RMB 50/mt ($7/mt) with the market price of 65 percent Brazilian fine ore at RMB 1,090/mt ($161/mt), down RMB 70/mt ($10/mt) week on week.
Influenced by the overall declining trend of prices in the domestic steel market, China's iron ore market continued to show weakness in the past week. Import iron ore prices were down dramatically, though in some regions a slight rebound was seen in domestic iron ore prices. Recently, some medium- and small-sized domestic steel mills have started to stop production and reduce output, and so iron ore demand has dropped substantially. Currently, deal activity for iron ore is rather slack at domestic ports, and sellers are seeking to boost their sales by adjusting their prices in a downward direction; thus prices of imported iron ore have dropped down by nearly 10 percent compared with the previous week. At present, steel mills are mainly holding a wait-and-see approach to the market, and the amount of imported iron ore being used by most mills has fallen sharply.
On the other hand, in the past week iron ore prices registered a slight rebound in Tangshan, Hebei Province, due to the climbing price of billet in this region, which has risen by RMB 200/mt ($29/mt) week on week. However, this increase in billet prices is the result of speculation and has led to a reduction in the transaction volume.