Domestic Iron Ore Prices Grow Slightly this Week, and to Remain Rangebound with Some Declines Next Week

SHANGHAI, Feb 3 (SMM) - Iron ore price changes across China this week: Tangshan city, Hebei province: up 10-15 yuan/mt in Qian'an city and Qianxi county; West Liaoning: up 5-10 yuan/mt in Chaoyang city, Beipiao city and Jianping county; East China: up 20-30 yuan/mt.

This week, the leading steel mills in Tangshan raised the bid price of iron ore concentrates, and the local key steel mills have successively completed the post-CNY holiday restocking. However, some steel mills indicated that the purchasing volume is not high since some goods were delivered in advance and the overseas futures prices may fall in the short term, which provides chances for the steel mills to bargain down the purchase prices.  Few dressing plants could reach full production because of the raw material shortage. Most of the dressing plants suspended their production owing to the problem of explosive supply, which further tightened the local concentrate supply and propped up the prices. SMM believes that the iron ore prices in Tangshan will fall slightly next week amid the game between buyers and sellers.

Domestic iron ore trading in west Liaoning was weak. Operating rates of dressing plants rose somewhat with the end of the CNY holiday. Mines which got finished inventory in their hands intended to quote high, and they were less willing to ship. On the demand side, traders followed the moves of Lingyuan Iron and Steel, a leading local steel mill, and raised the purchase prices as well. The traders were relatively cautious in purchasing, and they did not intend to purchase when prices were high.

In east China, transactions were slack following the CNY holiday. As the production and sales of the dressing plants returned to normal last week, traders' acts became active. Some said that they have recently shipped goods to Wu'an city, Hebei province. In addition, the overseas iron ore price index dropped somewhat this week. SMM believes that iron ore prices in east China may fall next week.

Most steel mills have completed the post-holiday stockpiling and may lower the purchase prices of iron ore afterwards. The operation of dressing plants has not fully resumed, tightening the concentrate supply in the market. Buyers and sellers may wrestle over the prices in the short term, and the iron ore prices are more than likely to fall in the near future.