Since news broke of the forced stoppages of steel production operations in the Wuan district in China's Hebei Province, the expanding scope of steel output reductions in China has raised the concerns of the ‘big three' iron ore mining giants. From last Wednesday, the iron ore sales divisions of Rio Tinto, Vale and BHP Billiton have started to contact their customers in northern China in order to gain detailed information regarding the steel production cutbacks in the region.
Transaction activity for imported spot iron ore is reported to be quiet in China's domestic market, especially after the steel production cutbacks in the provinces of Shanxi and Hebei, thereby increasing the worries of the global mining giants. Many traders consider that import iron ore spot market prices in China may follow a downward trend in the short term.
At Jingtang Port in Hebei, spot prices of 63-63.5 percent Indian fine ore have fallen from RMB 1,130 -1,250/mt ($168-186/mt) on September 6 to RMB 1,120-1,240/mt ($166-184) on September 13. Meanwhile, prices of domestic iron ore concentrate in Baoding in Hebei Province and in Anshan and Benxi in Liaoning Province have fallen, decreasing by RMB 20-60/mt ($2.97-8.92/mt) week on week.
As previously reported by SteeOrbis, on September 4 18 steel mills in the district of Wuan, Hebei Province received notice that they would have to halt production operations from September 5 for periods ranging from 20 days to one month. The Wuan district is the area which has the second highest concentration of the steel industry in China.