The Chinese iron ore market has retained its strong upward movement during the past week, with price increases registered in both imported and domestic ores. Currently, the soaring movement of the finished steel market is still the main factor pushing up iron ore prices, which are also boosted by tight spot supplies at the ports and by the stockpiling activities of some traders.
Product name | Specification | Average price (RMB/mt) | Price ($/mt) | Weekly change (RMB/mt) |
Iron ore concentrate | damp base (iron content: 66 percent) | 690 | 101 | 50 |
India fine ore | 63.5 percent | 860 | 126 | 100 |
The international shipping freight market again recorded an obvious correction during the past week. On August 7, the Baltic Dry Index (BDI) closed at 3,051 points, down 394 points compared with the level on July 31. On August 6, the average freight charge from Brazil to Beilun Port in China was $32.98/mt, down by $5.04/mt week on week. Meanwhile, the average freight rate from Western Australia to Beilun on August 6 was $12.26/mt, a decline of $2.24/mt week on week.
Over the past week imported ore prices in China's domestic market again climbed up sharply, while a continuous rise was seen in prices of domestic ore. At present, the price of 66 percent damp base iron ore in Tangshan, Hebei Province is up by RMB 50/mt ($7/mt) to the level of RMB 690/mt ($101/mt, tax excluded), while the market prices in the northeastern regions stand at RMB 630/mt ($92/mt, damp base/tax excluded), up RMB 70/mt ($10/mt) week on week. Meanwhile, the prices of 63.5 percent Indian fine ore are up by $5/mt to $85/mt FOB, while the CIF price (Tianjin Port) has risen by $5/mt week on week to $105/mt. Additionally, the price quotation of 63.5 percent Indian ore has increased by RMB 100/mt ($15/mt) week on week and is now at RMB 860/mt ($126/mt) at Chinese ports, while the deal price of 62.5 percent Australian PB fines has risen RMB 50/mt ($7/mt) to RMB 790/mt ($116/mt), with the market price of 65 percent Brazilian fine ore up by RMB 90/mt ($13/mt) to RMB 870/mt ($127/mt).
Driven by the continuous ascension of domestic finished steel prices, the Chinese iron ore market surged significantly in the past week. Given the considerable price hikes made by various mills and also taking into account the stockpiling activities of some traders, a significant jump has been observed in iron ore prices in the domestic market.
Currently, rising momentum is still evident in the imported ore market. The present imported ore prices have been affected not only by the price trend of finished steel, but also by the supply-and-demand relationship. Due to the tight availability of spot ore supplies as well as brisk market demand, mainstream market prices have indicated frequent upward adjustments in recent days. Since BHP Billiton and Rio Tinto still have not sent any shipments of spot ore to China, future arrivals of imported materials will be limited. In this context, some traders estimate that import quotations of Indian ore will be up to $110/mt CFR in the near future.