Ore market waiting for year-contract

SteelOrbis Shanghai The market conditions of domestic and imported ore are completely different in China. Market players think that Chinese iron ore prices will move up when the international iron ore price negotiations comes to a conclusion. However, the increase range and how long it may last remains unknown. The concentrated imported ore purchases of domestic steelmakers and traders led to a surge in ocean freight. The highest ocean freight for Indian ore to Tianjin Port is $20/mt; $5 higher than the normal level. The offer for Indian ore to Tianjin Port is close to $70/mt, which domestic steelmakers are not willing to accept. Nevertheless, offers for Indian ore continue increasing. According to CCCMC, the reference price of Indian ore is $53-54/mt FOB and $71-72/mt CIF. Based on this figure, the deal price of Indian ore at Tianjin Port will not pick up before the announcement of new internationally contracted iron ore prices. The international ocean freight is on the rise as well. The ocean freight for a 70,000 metric ton Panama vessel from West Coast of India to Tianjin Port is at $18/mt, and the lowest freight from East Coast of India to Tianjin Port is at around $17/mt. The current ocean freight from West Australia to Beilun/Baoshan is up 1.8% weekly at $10.3/mt. However, the business activity of import ore is not brisk. The Chinese iron ore market keeps the weak stable trend with little transactions concluded throughout the week. On March 30, the price of 66 percent damp base iron ore in Tangshan is RMB 500/mt ($62), and that in Beipiao, Liaoning Province is RMB 410/mt ($51), both prices excluding taxes. The price quotation of 63.5 percent Indian fine ore is RMB 620/mt ($77) at Tianjin Port, and the price at Qingdao Port is RMB 615/mt ($77). The Australian Hamersley 63 and 64 percent fine ore at Beilun Port is RMB 620/mt ($77). The above prices have remained unchanged compared with the previous week. The sales figure of iron concentrate in northeastern China declined. Some miners held “wait-and-see” attitudes. Therefore, the market price quotations slowly went down. A minority of small scale miners started selling products at low prices. This movement pressured other miners, though the impact on the prevailing market prices is small. The purchase volume of most steel mills in northern China is small, and their purchase prices are at low levels. The overall demand for iron concentrate is not strong in that region. Those mines which had suspended their production are now resuming their operations gradually. Most domestic miners are waiting to see the result of international iron ore price negotiations, therefore they are not very active in selling products. The price quotations in eastern China retain the level of the previous week. At present, the commercial activity is not brisk as the suspended blast furnaces of Jinan Steel and Laiwu Steel have not resumed operation yet. Furthermore, some second rate steel mills have also paused purchasing iron ore. Miners planned to lift their ex-factory prices, but steelmakers did not accept, leading to the weak market condition.