SHANGHAI, Jan 5 (SMM) - The concentrate price index of domestic iron ore stood at 915.7 yuan/mt last week, up 5.7% from a week earlier. Prices in major producing areas rose by around 100 yuan/mt.
The prices of domestic iron ore in Hebei, Shandong and Anhui have increased significantly as the imported ore prices rose sharply. Mines demanded higher prices as they believed that more mills will resume the production in January and restock before the Chinese New Year holiday. However, mills still restocked on demand. Imported iron ore prices corrected in the second half of last week, affecting the demand for domestic iron ore by mills.
The price increases in Liaoning were narrow as local mainstream mills demanded lower raw material prices. The prices of concentrate (Fe66%, wet basis, excluding tax) in Chaoyang stood at 750 yuan/mt, but the transaction prices were only 710-730 yuan/mt due to the heavy pressures from the steel mills. The mines in Liaoning were unwilling to make shipments in light of lower prices and price hike in surrounding market like Hebei. They believed that prices of concentrate (Fe66%) will rise to 800 yuan/mt before the Chinese New Year, and will increase their sales by then.
The prices of domestic ore in some regions may correct along with the prices of imported ore, and the prices in some regions may still be relatively firm, such as Liaoning and Yunnan. One reason is that the mines will hold the prices firm. On the other hand, some regions have plans of stockpiling before the Chinese New Year. For instance, a steel mill in Yunnan currently keep 30 days of domestic ore inventory and plans to gradually increase the stocks to around 40 days for the holiday.