Still characterized by an overall sluggishness, the Chinese iron ore market has seen reduced purchases from most mills during the past week. Although some traders are still bullish as regards the prospects for the future market trend, many players do not appear overly optimistic considering the bearishness of the domestic finished steel market.
Product name | Specification | Average price (RMB/mt) | Price ($/mt) | Weekly change (RMB/mt) |
Iron ore concentrate | damp base (iron content: 66 percent) | 730 | 108 | -10 |
India fine ore | 63.5 percent | 955 | 140 | -5 |
In the past week, the international shipping freight market again moved down slightly. On January 28, the Baltic Dry Index (BDI) closed at 3,118 points, down 52 points compared with the level on January 21. On January 28, the average freight charge from Brazil to Beilun port in China was $27.33/mt, down by $3.3/mt week on week. Meanwhile, the average freight rate from Western Australia to Beilun on January 28 was $11.07/mt, a rise of $0.74/mt week on week.
Iron ore prices in China have continued their minor decline during the past week. The price of 66 percent damp base iron ore in Tangshan, Hebei Province is at the level of RMB 730/mt ($108/mt, tax excluded), while the market prices in the northeastern regions stand at RMB 620/mt ($92/mt, damp base/tax excluded), both down by RMB 10/mt ($1.46/mt) week on week. Meanwhile, the prices of 63.5 percent Indian fine ore have declined to $110/mt FOB, while the CFR price (Tianjin Port) has slid by $5/mt to $125/mt. Additionally, the price quotation of 63.5 percent Indian ore is down by RMB 10/mt ($1.46/mt) to RMB 950-960/mt ($140-141/mt) at Chinese ports, while the deal price of 62.5 percent Australian PB fines is at RMB 990/mt ($146/mt), down by RMB 10/mt ($1.46/mt) week on week, with the market price of 65 percent Brazilian fine ore down by RMB 10/mt ($1.46/mt) to RMB 1,020/mt ($153/mt).
Remaining on its weak trend, China's domestic iron ore market has registered a slight slide in quotations over the past week. As a result of the decreased steel prices, mills have reduced their purchases and have tried to lower their purchase prices for iron ore, thus contributing to the poor levels of commercial activity in recent days. It is estimated that an increasing number of Chinese mills will cut back or even halt their production operations in the near future as the steel demand becomes slacker.
Currently, some iron ore traders still seem confident in the future market. Due to the limited iron ore orders placed in January, the arrivals of new materials will show a reduction in the future; meanwhile, the current market is still characterized by a shortage of supplies of overseas materials, by relatively high quotation levels of Indian ore and tight availability of high-grade supplies.
In recent years, the share of Indian ore in China's iron ore imports has gradually decreased, against the background of continuing briskness of ore imports from Australia and Brazil. In 2005 the share of Indian ore imports to China at 24.91 percent surpassed the share of Brazilian ore before sliding all the down to 17 percent in 2009, its lowest level in the 21st century.
| Australia | Brazil | India | South Africa |
2005 | 40.76% | 19.89% | 24.91% | 3.83% |
2006 | 38.85% | 23.24% | 22.92% | 3.85% |
2007 | 37.95% | 25.45% | 20.69% | 3.19% |
2008 | 41.34% | 22.68% | 20.51% | 3.27% |
2009 | 41.71% | 22.68% | 17.10% | 5.44% |