SteelOrbis Shanghai
Influenced by rising
freight charges, CIF quotations of Indian ore to
China continued to go up over the past week, with a brisk
trading performance observed in imported ore at
China's ports. Domestic ore saw stable movement on the whole, while local markets varied somewhat from each other.
On December 7, the price of 66-percent damp base
iron ore in Tangshan was up RMB 5/mt ($0.6) to RMB 580/mt ($74.1) excluding tax, while its price in Beipiao city of Liaoning Province was at RMB 460/mt ($58.8) excluding tax. The price quotation of 63.5-percent
India fine ore was up RMB 10/mt ($1.3) to RMB 655/mt ($83.7) at Tianjin Port, while the price at Qingdao Port was up RMB 5/mt ($0.6) to RMB 640/mt ($81.7). Meanwhile, the price of Australian Hamersley 62- and 63-percent fine ore at Beilun Port was at RMB 640/mt ($81.7), neutral week on week.
Although the FOB price of 63.5-percent
India fine ore remained constant at $55/mt, the CIF price increased $1/mt week on week to $76/mt because of the continuous rise in
freight charges.
In addition to the important role of international
iron ore prices in their costs,
China's steel mills cannot afford to neglect the fluctuations in
freight charges either. The average CIF price of imported ore to
China is at $63.08/mt for Jan-Oct, down 6.1 percent year on year. Among the countries that export
iron ore to
China, only
Brazil and
Australia hiked their prices by less than $2/mt. Meanwhile, the decrease in the export quotations of
India, South
Africa and other countries may be ascribed to the sharp drop in
freight. Furthermore, facility improvements at
China's ports also contributed to the cost lowering.
Throughout the past week, imported ore saw a good
trading performance at the ports, with a slight increase observed in inventory. By the end of the previous week, the total inventory of
iron ore in
China's twenty-three major ports amounted to 37.97 million mt, up merely 490,000 mt week on week. Therefore, confident about the future, traders hiked their quotations continuously.
The domestic
iron ore market saw stable movement over the last week.
In the northeastern region, steel mills reduced their purchases. Restricted by the current transportation difficulties, mines are unable to send much
iron ore to the other markets, and this led to the sluggish commercial activity of the past week. Market players pointed out that since the inventory of most northern steel mills was still low, the
trading volume would expand once the transportation conditions improved.
Iron ore prices continued their slight upward trend in Tangshan, with brisk
trading been seen. As regards the other regions, the market looks strong on the whole.
All in all, the Chinese
iron ore market looks set to maintain its current tendency. Influenced by the weather, the market supply has dropped a little; the continuous increase in
freight charges has boosted up imported ore costs; and the release of iron-making
production capacity has boosted demand for
iron ore. All these factors will ensure that the market trend won't change much in the short term.