Ore markets still gloomy in China; price talks unsettled yet

SteelOrbis Shanghai The fifth round of international iron ore price negotiation will be held soon. Baosteel and China's Iron and Steel Association (CISA) expressed their unwillingness to accept the price increase, however, CVRD still insists on raising iron ore prices by 24%, otherwise, it will consider selling iron ore in spot market. According to China Chamber of Commerce of Minerals and Chemicals (CCCMC), offers for 63.5-percent Indian fine ore are at around $53-54/mt FOB and $70-71/mt CIF, indicating $1-2/mt decline in freight rates compared to two weeks ago. On April 24, the iron ore inventory at China's 23 major ports totaled 40.61 million metric tons, up 400,000 metric tons from a week ago. Among the total, the quantity of Indian ore increased 480,000 metric tons week on week to 9.28 million metric tons. The transaction volume of imported ore has not recovered. It is not easy for Indian ore at Tianjin Port to get a favorable sales figure. The transaction volume of low iron content ore, which sells well before, is not satisfying. The commercial activities at Rizhao and Lanshan Ports are not optimistic either. The inventory at Rizhao Port is extremely large. The transportation fee in Hebei will be increased starting from June 1; therefore, the transportation cost of steel mills will rise RMB 30/mt ($4), which may lead commercial activities for imported ore to become brisker before June. In local markets, iron ore prices are more stable in South China and the mills in this region are more active in their purchases. The steel mills in North and East China have cut their iron ore procurement prices incrementally.