Domestic Iron Ore Prices to Stabilise at Lows

SHANGHAI, Nov 29 – On the supply side, a new round of air pollution warnings has been launched in Tangshan city of Hebei, and some beneficiation plants have stopped production. This, combined with the impact of road transportation policies, has tightened the supply. And some beneficiation plants in Liaoning and Shandong halted production for maintenance due to the cost issue. This, together with the higher prices of imported ore, offers some support for the domestic ore prices. And it bolstered the confidence of beneficiation plants and prompted them to raise their quotes. However, the inquiries were scarce and the trades were muted.  

On the demand side, the production restriction policy remains in place, and many blast furnaces have been shut down for maintenance. The demand for concentrates has been weak as steel mills mainly purchase on-demand. They pushed for lower domestic ore prices and mostly chose the more cost-efficient seaborne fines. 

SMM believes that the declines in the domestic ore prices will slow down in the short term amid the improved imported ore prices, despite the stalemate in the domestic ore market. It is expected that domestic ore prices will be weak and stable this week.