Chinese iron ore prices stable, ready to inch up

Chinese iron ore prices stable, ready to inch up

Chinese iron ore prices was stable this past week, but Chinese miners’ renewed confidence after last week’s meeting in Qingdao could set the stage for future increases. Price in northern China increased slightly, and sales transactions went up as well. In southern and southwestern China, prices were basically stable and transaction volume was normal. Generally speaking, import iron ore prices were stable, but some varieties saw minor declines. The inventory in steel mills was somewhat lower than normal. In addition, miners’ inventory also exhibited slight decreases. Compared to the previous week, by the end of trading on Thursday, November 3, the price of 66-percent damp base iron ore in Tangshan was up RMB 20/mt ($2) to RMB 520/mt ($64), excluding tax. The price of similar ore in Beipiao, Liaoning Province, was up RMB 10/mt ($1) to RMB 420/mt ($52), excluding tax. The price quotation of 63.5-percent India fine ore was RMB 650/mt ($80) at Tianjin Port，equaling that of the prior week; the price at Qingdao Port was down RMB 10/mt ($1) to RMB 630/mt ($78). Peru 65-percent pellet price at Beilun Port was down RMB 10/mt ($1) to RMB 890/mt ($110). While the price in Tangshan rose over the course of the week, not much commercial activity took place since miners were not willing to sell their products. In northeastern China, the price was stable at the beginning of the past week. Steelmakers in Hebei Province purchased products from the northeastern regions in an attempt to cut their procurement cost and supplement their inventory. This in turn drove up the iron ore price in those regions later in the week, even though the inventory of steelmakers and miners in that region was high. Prices in eastern China were steady with increased sales. As prices of finished products continuously dropped over the past months, steelmakers cut their iron ore procurement prices. Miners have not been inclined to sell at those lower prices; therefore, few transactions have been concluded. Some steelmakers, faced this past week with dwindling supplies of ore, found themselves forced to make large purchases. Since a majority of steelmakers are not willing to raise their procurement prices, they have instead taken to granting suppliers transportation allowances. For those mills that are willing to raise their procurement prices, increases of RMB 10-30/mt were reported, taking the price including 13% VAT to RMB 700/mt ($87), and possibly higher in some cases. Market players indicate that the demand will shoot up since some medium and small steelmakers have resumed purchasing raw material to start production due to the sudden increase in finished product prices. Meanwhile, the supply and demand analyses made by foreign miners at the international raw material meeting held last week in Qingdao boosted Chinese miners’ confidence about the future of the market. Chinese iron ore prices as a whole are showing an upward tendency. SteelOrbis Shanghai