SHANGHAI, Jul 8 (SMM) - In June, the average price index of domestic ore dropped by 31 yuan/mt, and the overall decline was narrower than that of last month. Domestic ore prices fell due to the poor downstream demand, the sharp drop in steel prices, and the expanded losses of steel mills after mid-June. Most steel mills stopped the production to overhaul the blast furnaces, which further decreased the demand for raw materials, and the iron ore prices dropped.
Mills that gained fewer profits preferred low-grade ores, so the cost efficiency of domestic 64-65% concentrate was low. However, the demand for 69% concentrate was good, and it could be used to mix with overseas low-grade ores. In addition, the low-aluminium and high-sulphur iron ores in Shanxi were also popular as they can be used to lower the aluminium content of sinter, and the prices were cheap.
In July, due to the rainy season and hot weather, the downstream steel demand will still be weak, so the steel profits may be at a low level. According to the blast furnace maintenance plan, it is expected that more pig iron output in July will be affected than that in June. At the same time, in June, due to the production safety inspection, the output of domestic mines decreased. Generally speaking, domestic ore prices will fall further in July. With the slow recovery of downstream demand at the end of July, ore prices will improve in late July.
