Negative pressures prevail in iron ore market in China

Thursday, 14 January 2016 13:54:25 (GMT+3)   |   Shanghai
       

During the week ending January 14, prices of import iron ore in China have indicated a declining trend, while transaction activity for import iron ore has been slacker compared to the previous week, still remaining at low levels. At the same time, traders’ offers of domestic production iron ore in Liaoning Province have followed a slight downtrend, though prices in Tangshan have moved on a stable trend, while overall demand for domestic production iron ore has been at decent levels. 

At present, Indian fine ores of 63.5 percent grade are offered at $50.3/mt at Qingdao port. Meanwhile, quotations of 66 percent iron ore concentrate in Tangshan stand at $47.3/mt and prices of the same material are at $44.2/mt in Beipiao, Liaoning, both excluding VAT. Prices of domestic production and imported iron ore in China are presented in the following table.

During the given week, the rebound in domestic finished steel prices has lost momentum, weakening the support for iron ore prices. Meanwhile, iron ore futures prices have edged down, thereby also exerting a negative impact on the iron ore spot market. Recently, overseas miners’ deliveries have increased, resulting in increased inventory levels at Chinese ports, which negatively affects iron ore prices. At the same time, steelmakers are unwilling to purchase imported iron ore, which reduces support for import iron ore prices. It is thought that iron ore prices in China will likely edge down further in the coming week as activity in the domestic finished steel market will become more sluggish approaching the Chinese New Year holiday (February 8-14). 
 
Domestic iron ore prices in local Chinese market
 
Product Spec. Place of Origin Market price excluding tax (RMB/mt) Price ($/mt) Weekly Change (RMB/mt)
Domestic iron ore concentrate damp base (iron content: 66%) Tangshan 310 47 -
damp base (iron content: 66%) Beipiao 290 44 -
 
17 percent VAT is excluded in all prices and all prices are ex-warehouse.
 
Imported iron ore prices in local Chinese market
 
Product Name Name of Port Iron Content % Place of origin Truck loaded price (RMB/mt) Price($/mt) Weekly Change (RMB/mt)
PB iron ore lump Qingdao 63/63.5 Australia 360-370 55-57 20
Brazil fines 63,5 Brazil 305-315 47-48 15
Yandi fines 58 / 59 Australia 285-295 44-45 15
PB Fines 62 Australia 345-355 53-54 20
PB iron ore lump 61.5 Australia 305-310 46-47 15
Indian fine ore 63.5 India 325-335 50-51 15
Indian fine ore 63 India 315-325 48-50 15
Indian fine ore 62 India 300-310 46-47 15
Indian fine ore 61 India 285-295 44-45 15
Indian fine ore 59 India 255-265 39-41 15
 
The prices are deal prices in local market.                                          
 
17 percent VAT is included in all prices and all prices are ex-warehouse.

$1 = RMB 6.59 


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