During the past week the Chinese iron ore market has continued to be characterized by.weakness. Influenced by the national policy to reduce power consumption and also by declines in domestic steel prices, both the transaction volumes and market prices of iron ore in China have decreased. Some steelmakers are preparing for a recovery, and so demand may see an improvement in the future.
Product name | Specification | Average price (RMB/mt) | Price ($/mt) | Weekly change (RMB/mt) |
Iron concentrate | damp base (iron content: 66 percent) | 890 | 133 | -10 |
India fine ore | 63.5 percent | 1,140 | 170 | -10 |
During the week in question, the international freight market fluctuated slightly. On September 16, the Baltic Dry Index (BDI) was at 2,737 points, down 251 points on the previous week. On September 16, the freight rate on the Tubarao, Brazil-Beilun/Baoshan shipping route was $27.89/mt, down $1.56/mt week on week, while on the same day the freight rate on the Western Australia-Beilun/Baoshan route was $10.78/mt, down $1.03/mt week on week.
During the week ending September 16 demand in China's iron ore market has continued to decline. On September 16, the transaction prices of 66 percent damp base iron ore are at RMB 890/mt ($133/mt, VAT excluded), while in the northeastern region market prices of iron ore are at RMB 800/mt ($119/mt, damp base, VAT excluded), down RMB 10-30/mt ($1-4/mt). Quotations of 63.5 percent Indian iron ore are at $128/mt FOB on the same date, while Tianjin port transaction prices stand at $147/mt (CFR), down $1/mt week on week. Meanwhile, mainstream quotations of 63.5 percent Indian iron ore at Chinese domestic ports are at RMB 1140/mt ($170/mt) , down RMB 10/mt ($1/mt), the transaction price of 62.5 percent Australian PB fines is RMB 1,120/mt ($167/mt), down RMB 10/mt (1/mt) on the previous week, while the market price of 65 percent Brazilian iron ore fines is RMB 1,210/mt ($180/mt), down RMB 20/mt ($3/mt) week on week.
During the past week, the Chinese iron ore market has seen a continuation of its weakness of the previous week and the general price trend has pointed downward. Influenced by national policy on energy savings and emissions reductions, and also affected by the downward movement of domestic steel prices, the transaction volume in the Chinese iron ore market has been poor. Most steel mills and traders are maintaining a wait-and-see policy, and so iron ore suppliers have lowered their prices.
According to customs data, in August China imported 44.61 million mt of iron ore, which is the lowest monthly volume since February 2009, down 10 percent year on year and down 13 percent month on month. In the January-August period, China imported 405 million mt of iron ore in total, equal to the volume in the same period of 2009.
In August China produced 48.84 million mt of pig iron, down 1 percent year on year and up 2.6 percent month on month. In the January-August period, China produced 400 million mt of pig iron, consuming 640 million mt of iron ore, with the latter figure up by 14 percent year on year. In August, China produced 99.58 million mt of iron ore, while from January to August inclusive China produced 681 million mt of iron ore, up 28.5 percent year on year.
In the present year up to and including August, Chinese iron ore demand increased by 14 percent, the import volume remained unchanged, while domestic output (as mentioned above) increased by 28.5 percent - all figures are compared with the previous year.