Domestic iron ore prices rose last week

Last week, the iron ore prices added 10-15 yuan/mt in Qian'an and Qianxi county in Hebei province; fell 10-15 yuan/mt in Chaoyang, Beipiao, and Jianping city in western Liaoning province; and lost 30-50 yuan/mt in east China.

The price rebound in Tangshan was mainly attributable to the rebound of overseas futures prices, prompting local leading steel mills to raise their bid prices. Abnormal ROM supply driven by explosives supply shortage resulted in tight concentrates resources, supporting iron ore prices. Most beneficiation plants stood on the sidelines. In terms of demand, the output of pig iron remained high, shoring up the demand for iron ore concentrates. But the recent weakening of steel prices has lowered the profits of steel mills, thus the mills pushed for lower iron ore prices. Trades of building steel products have been gradually picking up, and steel prices tend to strengthen. It is expected that the local concentrates prices will have room to rise.

Trades in western Liaoning were subdued due to local steel mills pushing for lower prices. While some beneficiation plants sold cargoes to generate cash, most of other plants stood on the sidelines. Trades in the east of Liaoning were still weak, affected by the leading steel mills halting purchases at end-March. Traders seldom made inquiries and were more cautious in purchasing goods. The demand for iron ore weakened, and there were few orders for resources produced by large mines. Supply and demand will be weak in the short term. Considering the recovery in overseas markets, local prices may have room to rebound.

Trading in east China has improved. Leading mines produced normally and sold aggressively. Some mines in Zibo, Shandong have plans for maintenance soon and the supply may thus tighten. Steel mills are still cautious in purchasing considering the current profit. Given the rebound in the MMi of seaborne ore last week, local prices should rise in the near term.