Iron ore prices retreat today, expectations not as good as before

Import iron ore prices in China have seen a decreasing trend today, Thursday, July 27, while they have also moved down compared to one week ago as demand has been slower and the drop in futures prices has exerted pressure.

Iron ore fines with 62 percent Fe content have decreased by $3.3/mt today to $113.5/mt CFR. This level is $2.85/mt below that seen one week ago. Brazilian iron ore with 65 percent Fe has indicated a decline of $2.95/mt on July 27 to $126.85/mt CFR, while down $3.4/mt week on week, SteelOrbis has learned.

Twenty-one deals for 396,600 mt in total have been concluded at Corex today, including 170,000 mt of 61.0 percent PB fines at $112.7/mt CFR, for laycan during September 10-19. 90,000 mt of 62.3 percent Newman fines have been traded at $113/mt CFR, for laycan during August 29-September 7.

During the given week, import iron ore prices have been gradually moving up amid the price rises for other raw materials, for coking coal and coke. At the same time, rebar and HRC futures prices have also seen increases, providing support for import iron ore prices. Moreover, policies for rebuilding villages inside megacities in China have bolstered market sentiments, exerting a positive impact on the steel market and bolstering the demand for import iron ore.

However, steelmakers’ profitability has shrunk due to rising raw material prices, which will reduce the demand for iron ore. And though more stimulus measures have been announced, most market sources are still waiting for details, and for now the demand-supply balance in the iron ore market will play the main role. As Tangshan mills have been asked to tighten BF production in late July, iron ore consumption has also been lower. It is expected that import iron ore prices in the Chinese domestic market will likely move on a downward trend in the coming week.

Iron ore futures prices at Dalian Commodity Exchange have decreased by 1.91 percent to RMB 848.5/mt ($119.1/mt) compared to the previous trading day (July 26), while decreasing by $0.5/mt compared to July 20.

As of Thursday, July 27, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,861/mt ($541.5/mt), rising by RMB 77/mt ($10.8/mt) or up 2.0 percent since July 20, while increasing by 0.18 percent compared to the previous trading day (July 26).

Imported iron ore prices in China (week-on-week basis)

Price includes VAT.

Nationwide iron ore concentrate prices (66 percent Fe)

Price includes VAT.

$1 = RMB 7.1265