SHANGHAI, Aug 11 (SMM) - Iron ore prices continued to fell and as of yesterday, the prices fell by 1.7% to 724.5 yuan/mt.

In terms of spot market, traders were less willing to ship and steel mills mainly purchased as needed, hence the market transactions were modest.

The transaction prices of PB fines in Tangshan stood at 780-785 yuan/mt, up 5 yuan/mt from Aug 9.  The transaction prices of PB fines in Tangshan were 790 yuan/mt yesterday, flat from a day ago.

Operating rates of blast furnaces stood at 90.34% as of August 10, up 0.89% from the previous week. The capacity utilisation rate of blast furnaces was 90.34%, an increase of 0.33% on the week. The daily average pig iron output of sample steel mills was 2.1615 million mt, up 7,900 on the week. The national daily average output of pig iron was 2.5732 million mt, up 9,300 mt on the week.

The production resumption of steel mills was less than market expected, hence the recovery of iron ore demand was slow.

At the same time, major steel mills in Hebei and Shandong raised the purchasing prices of wet quenched coke by 200 yuan/mt and CDQ by 240 yuan/mt. Due to the coke price hike, the profits of steel mills were under pressure and the increase of iron ore prices was limited.

Therefore, although the iron ore prices gained support from the resumption of steel mills, the prices of iron ore mainly depends on the demand for finished products and the recovery of profits. At present, the increase in the prices of finished products is limited. In addition, the coke price hike puts pressure on the profits. Therefore, SMM expects that the iron ore prices may continue to fluctuate in the short term.