SHANGHAI, Jul. 26 (SMM) – On Jul. 25, DCE 1709 iron ore closed at 526.5 yuan per tonne, up 3.24 per cent on a daily basis, and price in China’s domestic spot market followed up, with deals for PB heard at 520-530 yuan per tonne in Shandong, up 5-15 yuan per tonne from Monday’s level. Overall trading sentiment also picked up thanks to brisk inquiries by steel mills. 

At present, domestic steel mills show high buying interest in medium and high-grade ore, and some traders have held back sales amid rising optimistic sentiment. Sales of low-grade SS fines, however, are sluggish, growing pile-ups, and its spot price lacks the rising strength as a result. 

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Price of imported ore have been rising since mid-late June, with the Platts 62% iron ore index briefly returning to $70 last week, and domestic iron ore prices also lurched higher in turn. Meanwhile, supply tightness in China’s major trading markets also inspired miners to raise offers. SMM survey finds following insights. 

Northeast China
Ore supply has been tight since the beginning of the year, and local iron mines, which fails to meet environmental protection requirements, remain offline. One mill in Liaoning said it plans to buy about 500,000 tonnes of iron ore, but so far only completed 20 per cent of the purchase plan. Another mill in Fushun said to have subsidy measures for iron mines which can meet its monthly ore demand. Ore supply shortages in the region will keep bolstering up local price. 

South China
One SOE mine said local mills raised concentrate purchase price by 40 yuan per tonne, but bigger gains in imported ore price and stringent environmental protection inspections, which prevents disqualified mines from returning online, would presage more ore gains. 

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Central China
One local mill, which restarted production at blast furnaces after maintenance, said to purchase imported ore for production needs due to supply shortages of concentrate in the region. The mill plans to buy non-mainstream low-grade imported ore to mix with local concentrate for production given bigger gains in mainstream medium and high-grade ore. 

East China
Pellet supply in Shandong is tight as local large pellet producers remain in unit maintenance, and concentrate supply is much tighter, with offers firm. One SOE mine in Anhui supply ore directly to its own mill, and other mines supply ore to mills in other provinces. One mill in Henan said no ore was available from Anhui recently, leaving upward room for ore price.   

In other news, China’s iron ore imports remain high. According to China Customs, China imported 94.70 million tonnes of iron ore in June, becoming the fourth month with imports exceeding 90 million tonnes. The imports from January to June reached about 540 million tonnes, up 9.3 per cent on a yearly basis, and based on this, China’s iron ore imports will easily climb above 1 billion tonnes. 

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