SteelOrbis Shanghai
Since the leading mills successively hiked their ex-factory prices, mines and traders are quite confident about the future market. Japanese mills reached an agreement with India on the 9.5-percent increase in iron ore prices. Therefore, the prices of Indian ore are likely to rise in the coming days. China's iron ore market saw an overall upward movement over the past week, though the trading volume was at a normal level. As regards imported ore, a sharp jump up in inventory was seen at the ports.
On February 8, the price of 66-percent damp base
iron ore in Tangshan has risen RMB 5/mt ($0.6/mt) to RMB 595/mt ($76.8/mt) excluding tax excluded, while its price in Beipiao Liaoning Province was up RMB 20/mt ($2.6/mt) to RMB 495/mt ($63.9/mt) excluding tax. The price quotation of 63.5-percent
India fine ore was up RMB 10/mt ($1.3/mt) to RMB 710/mt ($91.6/mt) at Tianjin Port, while the price at Qingdao Port has risen RMB 10/mt ($1.3/mt) to RMB 690/mt ($89/mt). Finally, the price of Australian Hamersley 62- and 63-percent fine ore at Beilun Port was up RMB 10/mt ($1.3/mt) to RMB 690/mt ($89/mt).
The Chinese mills made frequent upward adjustments to their ex-factory prices in recent days. Following this trend, the mines in northeastern and northern
China all increased their prices. Nevertheless, with their high inventory levels, the large mills were not interested in making purchases. Medium and small mills, on the other hand, decided to stand aside and await future market developments. As a result, the
trading volume last week was quite flat.
Furthermore, due to the upcoming Spring Festival (18-25 February), excepting the large mines which are producing at normal levels, some medium and small mines have already ceased operations, resulting in reduced supply. Confident in the post-festival market, the large mines used the raised ex-factory prices of the mills as an opportunity to make upward adjustments to their own prices.
During the past week, Japanese mills reached an agreement with
India on the 9.5-percent increase in
iron ore prices. Consequently, the prices of imported ore saw an overall rise at the ports. According to some traders, while they received many inquiries, their
trading performance nevertheless left something to be desired.
In addition, since some traders will no longer qualify as
iron ore importers due to the stricter official requirements, they thus did their utmost to import as much
iron ore as possible recently, leading to the sharp increase in arrivals last week. By the end of the previous week, the total
iron ore inventory at
China's twenty-three major ports had already amounted to 41.83 million mt, dramatically up 2.04 million mt week on week.
All in all, due to the low
trading volume and the high inventory levels at the ports,
China's
iron ore market will face certain pressure in the short run. Prices are expected to see stable movement with a continuing upward tendency, probably with a slight decline in actual deal prices in some regions.