No improvement in activity in iron ore market in China

During the week ending January 21, prices of import iron ore in China have indicated a rebound, while transaction activity for import iron ore has not seen any improvement compared to the previous week, still remaining at low levels. At the same time, traders’ offers of domestic production iron ore in Liaoning Province have moved on a stable trend, though prices in Tangshan have indicated slight upticks, while overall demand for domestic production iron ore has been at decent levels.

 

At present, Indian fine ores of 63.5 percent grade are offered at $51.8/mt at Qingdao port. Meanwhile, quotations of 66 percent iron ore concentrate in Tangshan stand at $48.8/mt and prices of the same material are at $44.2/mt in Beipiao, Liaoning, both excluding VAT. Prices of domestic production and imported iron ore in China are presented in the following table.

During the given week, finished steel futures prices have increased, exerting a positive impact on sentiment in the iron ore market and contributing to the rebound seen in import iron ore prices. However, since demand for finished steel is slack, Chinese steelmakers have reduced their outputs, with a negative impact on demand for iron ore. Meanwhile, the increases in iron inventories at Chinese ports reflect slack consumption in the iron ore market. Although steelmakers will continue to purchase certain volumes of iron ore, these are unlikely to provide sufficient support for increases in prices. It is thought that iron ore prices in the Chinese market will edge up slightly in the coming week amid the lingering bullish sentiment in the market, while a stable trend is expected to be seen subsequently as the Chinese New Year holiday approaches. 

 

The prices are deal prices in local market.                                          

 

17 percent VAT is included in all prices and all prices are ex-warehouse.

$1 = RMB 6.58