Domestic Iron Ore Prices Stabilised Last Week And To Strengthen This Week

Last week, the iron ore prices rose 1-5 yuan/mt in Tangshan, Qian'an and Qianxi county in Hebei province; climbed 1-5 yuan/mt in Chaoyang, Beipiao, and Jianping city in western Liaoning province; and fell 1-5 yuan/mt in east China.

The prices in Tangshan have been relatively stable. Leading steel mills held bid prices stable last week. Despite big gains in overseas futures contract prices, steel mills pushed for lower prices. Beneficiation plants raised prices due to tight resources. SMM understood that there were resources flowing to Tangshan from eastern Liaoning recently. As the price spread between the two regions gradually narrowed, available cargoes in Tangshan will decrease. Bid solicitations have not met expectations of steel mills that pushed for lower prices. Therefore, iron ore prices will have room to rise in the near term.

Trading in the western Liaoning market was still weak. Beneficiation plants raised prices and refused to sell when the prices were lower than their acceptable prices. Traders stood on the sidelines, muting trades. Given tight supply and traders in no rush to purchase cargoes, prices will remain firm in the near term.

Leading mines in east China were still in normal production, and produced according to sales, with no inventory pressure. At present, the ROM shortage has not affected production. Steel mills purchased as needed amid low inventories, and high pig iron output supported demand for iron ore. As the imported iron ore price index rose last week, it is expected that the local iron ore prices will still have upside room this week.

In general, the fundamentals of domestic iron ore have not changed much. The resumption of work in some major production areas is slow, and resources are still tight. On the demand side, operating rates of blast furnaces at steel mills were still at a high level, which supported demand. However, considering that steel mills still push for lower prices, local iron ore prices will move rangebound in the near term.