Prices of Indian ore at Chinese ports rising

SteelOrbis Shanghai Chinese iron ore market saw both roaring prices and brisk commercial activities throughout the week. On September 7, the price of 66 percent damp base iron ore in Tangshan increased RMB 5/mt ($0.6) compared with August 31, to RMB 500/mt ($63) excluding tax, and that in Beipiao Liaoning Province increased RMB 5/mt ($0.6) to RMB 415/mt ($52.3) excluding tax. The quotation of 63.5 percent ex-India fine ore increased RMB 10/mt ($1.3) to RMB 640/mt ($80.6) at Tianjin Port, and the price at Qingdao Port increased RMB 10/mt ($1.3) to RMB 630/mt ($79.3). The price of ex-Hamersley, Australia 63 and 64 percent fine ore at Beilun Port retained RMB 620/mt ($78.1) level. In July and August, Chinese steel market experienced a downturn for nearly two months, and many steel mills also arranged overhauling during that period. Steel mills reduced iron ore inventory, resulting in the sluggish demand on iron ore. But since the end of August, the performance in Chinese steel market has indicated an obvious upward trend due to the rebounding of domestic and foreign demand on steel products. Steel mills began to increase the iron ore purchase, eventually pushing up iron ore prices last week. In recent days, iron ore prices in Hebei region saw a continuous increase. Because of the low market prices earlier, mines and traders were not willing to sell their products. Therefore steel mills had to hike purchase prices, driving up the market prices. It seems that mines accept the current prices, as they began to sell their products at a large quantity. Market in northeastern regions moved steadily. Previously, influenced by the electricity supply and weather, some local mines were not in normal production, leading to the low inventory. Now, despite a little tight supply, the situation turns better. On the imported ore side, with the price rise of domestic ore, steel mills increased purchase of imported ore. In the previous two week, trading volume at ports saw a continuous rise with the decline in inventory, which caused traders to hike their prices recently. The markup of ex-India ore price is quite remarkable, with RMB 5-10/mt ($0.6-1.3) increase at various ports. The price hike of imported ore is also related with the rise in freight. At present, the export quotation of ex-India 63.5 percent iron ore is $71-72/mt CFR China, slightly up compared with $67-68/mt CFR China in the previous weeks. At the end of week 33, the total inventory of iron ore in China's twenty-three major ports was 40.77 million mt, up 90,000 mt week on week. The upward trend for Chinese iron ore market has started. With steel mills' production increase in the future, there will be a further rise for iron ore demand. However, the market may keep stable next week.