Rebound in futures provides support for iron ore spot prices in China

During the week ending June 4, prices of imported iron ore in China have mostly indicated a rising trend, while transaction activity for imported iron ore has been at decent levels. At the same time, traders' offers of domestic production iron ore in Tangshan and Liaoning Province have followed a stable trend.

At present, Indian fine ores of 63.5 percent grade are offered at $72.6/mt at Qingdao port. Meanwhile, quotations of 66 percent iron ore concentrate in Tangshan stand at $74.2/mt and prices of the same material are at $59.7/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, traders and overseas miners have increased their offer prices for iron ore as some grades have been in short supply. Meanwhile, iron ore futures have indicated a slight upward movement, providing a certain degree of support for iron ore prices in the spot market. At the same time, Chinese domestic production iron ore prices have remained stable against the backdrop of a lack of activity. With iron ore futures prices having indicated a rebound, it is expected that import iron ore prices in China will move up slightly in the coming week, though by a limited margin.

$1 = RMB 6.20