Domestic Iron Ore Prices to Stabilise in the Short Term

SHANGHAI, Dec 7 (SMM) – The domestic iron ore index rose by 0.3% to 778.01 yuan/mt last week. The price moves were mixed. Domestic ore prices stabilised last week and transactions thinned in multiple regions.   

Some beneficiation plants in Shandong suspended production for maintenance. Therefore, the supply in the market thinned. The plants held prices firm as the imported iron ore futures prices trended higher. Steel mills were cautious in purchasing amid the production restrictions. There were many inquiries on domestic ore, but transactions were slack.   

The production restrictions continued to tighten in Hebei. Multiple companies in Tangshan have been required to suspend operation of blast furnaces and the demand for concentrates weakened. The beneficiation plants in Chengde and Hanxing suspended production for maintenance amid tight supply of ROM (run-of-mill ore). Hence local mills ramped up inquiries of products from other regions. The market prices weakened amid weak supply and demand. 

Domestic ore prices are expected to stabilise this week as the beneficiation plants in many regions suspended production and the supply tightened. The demand for iron ore concentrates weakened amid the production restrictions, though domestic products were more cost-effective as imported iron ore prices trended higher. The market held a wait-and-see outlook and transactions thinned. Therefore, domestic iron ore prices are likely to be stable in the short term amid wait-and-see sentiment and thin transactions.