WEEKLY: China’s iron ore concentrate price up further

Both buy and sell prices of Chinese iron ore concentrates increased again over the May 13-17 week, rising by Yuan 5-20/tonne ($0.7-2.9/t) and mirroring the trend in prices of imported iron ore which surged to new highs, according to Mysteel’s latest weekly survey released late last Friday.

Last week, prices of imported iron ore at ports and seaborne both jumped to a five-year high, which made domestic iron ore more cost-effective. Domestic miners also lifted offer prices of concentrates but their increase was far more sedate compared with the former.

For instance, as of May 17, Mysteel’s price index for 62% Australian iron ore fines port inventories surged by Yuan 32/wmt on week to top Yuan 723/wmt FOT Qingdao and including the 13% VAT, equivalent to Yuan 803.3/dmt and hitting a five-year high.

By contrast, offer prices for 66% Fe content concentrates in Tangshan in North China’s Hebei province grew by a slight Yuan 10/dmt on week to Yuan 815/dmt EXW and including 13% VAT.

As a result, those Chinese steelmakers which had replenishment demand for ore were willing to accept miners’ offers and raised their buying prices of concentrates while miners’ stocks were at low level. For example, mills in Tangshan stepped up consumption of concentrates for pelletizing in shaft furnaces when they were obliged to restrain operations on their sintering machines recently, a survey respondent said.

Although domestic miners actively ramped up concentrates production, their inventories nonetheless steadily declined to a low level because of robust demand from steel mills – another reason for the prices of concentrates to firm at high level, Mysteel Global understands.

Mysteel’s bi-weekly survey showed that stocks of iron ore concentrates at the 186 surveyed mining companies declined for a third straight survey period during April 26-May 9, dipping by another 136,200 tonnes or 3.4% during the period to 3.9 million tonnes, a two-month low.

Written by Zhiyao Li, lizy@msyteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com

Table 1: China’s iron ore concentrate prices in major production bases

Product	Place of Origin	Grade	Price	Change	Notes
Concentrate	Tangshan, Hebei Province	66%	815	+10	3
Concentrate	Handan/Xingtai, Hebei Province	66%	835	+6	2
Concentrate	Daixian, Shanxi Province	65%	580	+10	1
Concentrate	Beipiao, Liaoning Province	66%	625	-10	1
Concentrate	Liaoyang, Liaoning Province	65%	615	+10	1
Concentrate	Fushun, Liaoning Province	66%	735	+20	3
Concentrate	Zibo, Shandong Province	65%	850	+15	3
Concentrate	Fanchang, Anhui Province	65%	810	-	3
Concentrate	Daye, Hubei Province	63%	690	-	3
Concentrate	Heyuan, Guangdong Province	64%	630	-	3
Concentrate	Hainan	63%	550	+5	2
Notes: 1 - Wet basis, excluding tax; 2 - Dry basis, excluding tax; 3 - Dry basis, including tax. (Unit: Yuan/t)

Table 2: China’s steel mills’ procurement prices in major areas

Steel Company Name	Region	Grade	Price	Change	Notes
Jianlong Steel Co., Ltd.	Hebei	65%	720	+10	2
Hebei Jinxi Iron and Steel Co., Ltd.	Hebei	66%	815	+10	1
Handan Iron Steel Co., Ltd.	Hebei	66%	830	-	1
Xinxing Ductile Iron Pipes Co., Ltd.	Hebei	65% (acid)	820	-	2
Benxi Iron and Steel Co., Ltd.	Liaoning	65%	720	-	3
Fushun Xinfu Steel Co., Ltd.	Liaoning	66%	740	+20	3
Yongfeng Steel Co., Ltd.	Shandong	65%	860	-	1
Xinxing Ductile Iron Pipes Co., Ltd.	Anhui	64%	850	+5	2
*Shanxi Xingyuan Group	Shanxi	65%	510	+10	5
*Shanxi Liheng Iron & Steel Co., Ltd.	Shanxi	65%	650	+10	2
Fujian Sangang (Group) Co., Ltd.	Fujian	64%	705	-	2
Guangdong Shaoguan Iron & Steel Co., Ltd.	Guangdong	64%	584	-	1
Xinyu Iron & Steel Co., Ltd.	Jiangxi	64%	584	-	1
Notes: 1 - Dry basis, including tax, payment by acceptance, delivery; 2 - Dry basis, including tax, cash payment, delivery; 3 - Dry basis, including tax, payment by acceptance, delivery, base price; 4 – Dry basis, excl. tax, delivery, base price; 5 - Wet basis, excl. tax, no delivery (Unit: Yuan/t) *Sample objects here are altered to Shanxi Xingyuan and Shanxi Liheng from previous Jiugang Group and Changzhi Steel, as of the Dec. 8-12, 2014 session