SteelOrbis Shanghai In order to support
China Iron & Steel Association and
Baosteel against the 19 percent
iron ore price increase by CVRD, large and medium sized Chinese steel mills are delaying their
iron ore imports. But small-sized steel mills are worried that
iron ore prices would rise in the future; therefore, they have increased purchasing and accepting the price increase proposed by miners and traders, which resulted in higher
iron ore market prices.
Iron ore prices are expected to increase further in the short run. While both Brazilian CVRD and
Baosteel abstain from reaching an agreement,
Baosteel is trying to negotiate with Australian
BHP Billiton and
Rio Tinto in order to obtain a “Chinese price” from them. It is heard that, after evaluating the gain and loss of not signing long-term contract with CVRD,
Baosteel tends to purchase
iron ore from CVRD through spot exchange and reduce the purchasing quantity when the domestic ore supply increases. Chinese
iron ore market prices began rising last week. Prices of both domestic and imported ore went up. The increase was especially higher for the Brazilian ore. On June 1, the price of 66 percent damp base
iron ore in Tangshan was RMB 480/mt ($60), and that in Beipiao Liaoning Province was RMB 400/mt ($50). The above-mentioned prices exclude taxes and are RMB 10/mt ($1) higher compared with the level of the previous week. The price quotation of 63.5 percent Indian fine ore was RMB 635/mt ($79) at Tianjin Port, up RMB 10/mt ($1) week on week, and RMB 615/mt ($77) at Qingdao Port, up RMB 5/mt. The price of Australian Hamersley 63 and 64 percent fine ore at Beilun Port increased RMB 20/mt ($3) to RMB 640/mt ($80). The price of 67 percent Carajas,
Brazil fine
iron ore was at RMB 685/mt ($85) at Qingdao, up RMB 40/mt ($5) week on week. On May 26, the total inventory of
iron ore in
China's twenty-three major ports was at 42.93 million metric tons, up 1.13 million metric tons week on week. According to
China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters (CCCMC), the FOB price of 63.5 percent Indian fine ore is at $50-51/mt, $1/mt higher than that of the previous week, and the CIF price is at $66-67/mt, $1/mt higher than that of the previous week.