Domestic Iron Ore Prices Climbed and Will Have Upward Room

SHANGHAI, Mar 3 (SMM) - This week, iron ore prices rose 10-15 yuan/mt in Tangshan, Qian'an and Qianxi county in Hebei province; up 10-15 yuan/mt in Chaoyang, Beipiao, and Jianping in western Liaoning province; up 20-30 yuan/mt in east China.

At the beginning of the week, leading steel mills in Tangshan lowered their purchase prices, while sellers held back cargoes. This forced local steel mills to raise prices in the middle of the week. Iron ore resources have tightened due to the protracted production halts and restrictions on explosives supply, supporting prices. Mines and beneficiation plants stood on the sidelines ahead of the National People's Congress (NPC) and the National Committee of the Chinese People's Political Consultative Conference (CPPCC) in anticipation of positive news. On the demand side, buyers purchased on demand, and pushed for lower prices while grappling with poor profit. There would still be upside room for domestic iron ore prices next week.

The market in western Liaoning was subdued. And the price increase by local steel mills was relatively small. In the short term, prices will remain stable. Mines and beneficiation plants are bullish over the market and thus held back cargoes. Traders, though optimistic, purchased high-priced cargoes cautiously. Inquiries increased, though. Local prices should rise in the short term.

The market in east China was firm, even as inventories across mines and beneficiation plants increased. Trades will be subdued in the near term. Sizeable finished-product inventories at steel mills led to weak demand for concentrates. Iron ore prices are poised to fall.

In aggregate, the domestic iron ore supply is still tight, and the mines and beneification plants are standing on the sidelines. Steel mills have struggled to break even. Both supply and demand are weak. But considering stockpiling by steel mills, domestic ore prices will still have room to rise in the short term.