SHANGHAI, May 25 (SMM) – Imported iron ore prices fell sharply last week after the State Council vowed to curb the unreasonable rise in commodity prices. Prices of mainstream fines in the port spot market fell 50-137 yuan/mt, and purchase by steel mills slowed down significantly. Imported ore prices may still have room for recovery after consolidation this week.

Port arrivals rose 7.5% on a weekly basis to 12.18 million mt during May 9-15, but departures from Australia fell 13.7% to 15.56 million mt and, and departures from Brazil did not see a significant increase. Inventory across 35 domestic ports have declined for three consecutive weeks. Steel mills still favour mainstream medium and high-grade ore and supply of mainstream ore will remain tight, which will support prices of medium and high-grade ore.

Operating rates of blast furnaces rose 0.1 percentage point on a weekly basis and 1.1 percentage points on a monthly basis to 86.9% last week. Purchase of spot cargoes from ports may pick up after steel mills stood on the sidelines in the previous week. However, the seven consecutive rounds of rise in coke prices have affected steel mill profit and may pose downward risks to iron ore prices.