During the week ending September 4, prices of imported iron ore in China have continued to indicate a downtrend, while transaction activity for imported iron ore has been better than in the previous week, and is at decent levels. At the same time, traders' offers of domestic production iron ore in Tangshan have seen a slightly soft trend, while traders' offers of domestic production iron ore in Liaoning Province have remained stable. Transaction activity for domestic iron ore has been slack.
At present, Indian fine ores of 63.5 percent grade are offered at $99/mt at Qingdao port. Meanwhile, quotations of 66 percent iron ore concentrate in Tangshan stand at $102.3/mt and prices of the same material are at $89.3/mt in Beipiao, both excluding VAT. Prices of domestic production and imported iron ore in China can be viewed in the SteelOrbis price reports section.
Domestic finished steel prices have continued to decline over the past several weeks, exerting a negative impact on the Chinese iron ore market. Traders and miners have cut their sales prices for iron ore, dragging down iron ore prices in the spot market in China. Currently, iron ore sales prices are close to the production costs of small Chinese miners, resulting in a shrinking of domestic iron ore supplies. Meanwhile, domestic miners have been unwilling to sell and so Chinese steelmakers have mostly been purchasing imported iron ore. Since inventory levels on the steelmakers' side have been at low levels, it is expected that steelmakers will increase their iron ore purchase volumes and that the declining trend of iron ore prices in the Chinese market will likely come to an end in the coming week.