Posted on 25 Aug 2021
China’s offering prices of domestically-produced iron ore concentrates slipped for the fourth week by Yuan 55-130/tonne ($8.5-20.1/t) on week over August 16-20 in major production bases across the country, which was mainly due to the overall intensifying pessimism in the iron ore markets, both seaborne and domestic, as the demand from the Chinese mills has been waning together with less steel output, sources remarked.
As of August 20, the 66% Fe grade domestic iron ore concentrates in Tangshan in North China’s Hebei under Mysteel’s assessment fell to a four-month low of Yuan 1,285/dmt EXW and including the 13% VAT, or down another Yuan 55/dmt on week.
“Last week, the market sentiment was blown by the sharp falls in China’s iron ore futures prices and imported iron ore prices, and the domestic iron ore prices, without doubt, followed,” a Shanghai-based analyst commented.
The most-traded January 2022 iron ore contract on China’s Dalian Commodity Exchange lost Yuan 54/dmt from the settlement price of August 13, closing the daytime trading session at Yuan 777.5/dmt on August 20.
As for the imported iron ore, Mysteel SEADEX 62% Australian Fines, for example, approached its nine-month low as of August 19, falling to $129.25/dmt, and it slumped by $21.2/dmt on week to $139.55/dmt by last Friday, with the index in terms of CFR Qingdao.
All the price slumps had to do with lower steel output in general in China, and steel mills in Tangshan further cut their bidding prices for domestic iron ore concentrates because of this, the Shanghai analyst said.
“Most of the Chinese steel mills had preferred to keep low in-house iron ore stocks, thus slowing down in replenishment and those with high stocks at their steelworks cut their bidding prices even more aggressively,” she added.
As of August 20, the offering prices of 65% Fe grade domestically-produced iron ore concentrates in East China’s Shandong, China’s third largest steel production base by July, fell by Yuan 112/dmt on week to Yuan 1,313/dmt EXW and including the 13% VAT, or the lowest since April 2, according to Mysteel’s assessment.
Steel mills in Shandong appeared reluctant in stocking up much either, as they are also under restriction on their steel production with Beijing’s call for lower steel output for 2021, and any iron ore procurement is preferred at lower prices, Mysteel Global noted.
“They have no plan to increase output recently, and it is uncertain whether the curbs will be loosened in autumn,” the analyst said.
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% |
1,285 |
-55 |
3 |
|
Concentrate |
Handan/Xingtai, Hebei Province |
66% |
1,248 |
-99 |
2 |
|
Concentrate |
Daixian, Shanxi Province |
65% |
1,110 |
-100 |
1 |
|
Concentrate |
Beipiao, Liaoning Province |
66% |
880 |
-130 |
1 |
|
Concentrate |
Liaoyang, Liaoning Province |
65% |
1,050 |
-110 |
1 |
|
Concentrate |
Zibo, Shandong Province |
65% |
1,313 |
-112 |
3 |
|
Concentrate |
Fanchang, Anhui Province |
65% |
1,410 |
-120 |
3 |
|
Concentrate |
Daye, Hubei Province |
63% |
1,450 |
- |
3 |
|
Concentrate |
Heyuan, Guangdong Province |
64% |
1,340 |
- |
3 |
|
Concentrate |
Hainan |
63% |
935 |
-76 |
2 |
|
Notes: 1 - Wet basis, excluding tax; 2 - Dry basis, excluding tax; 3 - Dry basis, including tax. (Unit: Yuan/t) |
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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% |
- |
- |
2 |
|
Hebei Jinxi Iron and Steel Co., Ltd. |
Hebei |
66% |
1,260 |
-50 |
1 |
|
Handan Iron Steel Co., Ltd. |
Hebei |
66% |
1,248 |
-99 |
1 |
|
Benxi Iron and Steel Co., Ltd. |
Liaoning |
65% |
1,350 |
- |
3 |
|
Fushun Xinfu Steel Co., Ltd. |
Liaoning |
65% |
1,300 |
-50 |
3 |
|
Yongfeng Steel Co., Ltd. |
Shandong |
65% |
1,317 |
-112 |
1 |
|
Xinxing Ductile Iron Pipes Co., Ltd. |
Anhui |
64% |
1,550 |
-100 |
2 |
|
*Shanxi Xingyuan Group |
Shanxi |
65% |
1,350 |
- |
5 |
|
Fujian Sangang (Group) Co., Ltd. |
Fujian |
64% |
1,450 |
- |
2 |
|
Guangdong Shaoguan Iron & Steel Co., Ltd. |
Guangdong |
64% |
1,100 |
- |
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 from previous Jiugang Group as of the Dec. 8-12, 2014 session |
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Source:Mysteel Global
