No restriction on imported iron ore prices

SteelOrbis Shanghai Under the circumstances that the third round of international iron ore price negotiations have not yet reached any agreements, rumors have been rife that the Ministry of Commerce had released a Notice on the Management of Iron Ore Imports, to slow down the process of issuing import license, and to suppress the increase in prices of products imported from Australia and Brazil. It was told that the notice was ruling out the entry of iron ore at unreasonable import volumes, keeping the track of foreign suppliers, and preventing the supply of imported iron ore to companies whose blast furnaces are smaller than 200 cubic meters. What is more important, the government was rumored to be blocking iron ore imports above a price cap, which was set as $54 CFR for the Australian ore and $70 CFR for the Brazilian ore with this notice. However, the Ministry of Commerce denied the claims. The responsible for foreign trade section of the Ministry of Commerce stated that there were no restrictions on imported iron ore prices. A person at China Chamber of Commerce of Metals, Minerals and Chemicals Exporters and Importers (CCCMC) also mentioned that CCCMC did not have such a restriction either. Meanwhile, Chinese iron ore markets remained stable last week with minor fluctuations. Neither the business activity nor the purchasing prices of steelmakers changed much. The domestic iron ore market is expected to maintain the stable trend. On Thursday, March 9, the price of 66-percent damp base iron ore in Tangshan rose RMB 10/mt weekly to RMB 505/mt ($63), while that in Beipiao, Liaoning Province kept firm at RMB 410/mt ($51), both prices excluding taxes. The price quotation of 63.5-percent India fine ore dropped RMB 5/mt to RMB 625/mt ($78) at Tianjin Port, and the price at Qingdao Port rose RMB 5/mt to RMB 620/mt ($77). The price of Australian Hamersley 63 and 64 percent fine ore at Beilun Port remains unchanged at RMB 610/mt ($77). After the Spring Festival, steelmakers have lowered their purchasing prices several times, and they adopted the purchasing strategy of “small quantity, but more orders”. However, except some miners selling small quantities of products to cash in, most miners are not willing to sell large quantities of products at the current price level. The decreasing inventories in steel mills are challenging the continuity of steelmakers' production. On the other hand, miners' inventory is increasing and causing to the pressures on cash flow.