It is reported that iron ore concentrates market in Hubei region is stable with good transaction. However, miners’ inventory level is low and the resource is tight. At present, 63% iron ore concentrates is quoted at CNY 1130 per tonne to CNY 1160 per tonne in Daye, 63.5% iron ore concentrates is offered at CNY 869 per tonne to CNY 870 per tonne in Ezhou, traders offer for 65% iron ore concentrates CNY 900 per tonne.
The overall steel market recently is stable. However, China’s central bank announced recently that it would increase the benchmark lending and deposit rates since October 20th affected by this, prices for oil, gold and non-ferrous metal all collapsed, we believe it will definitely lead negative influence toward the steel market and causes impact on the raw material purchase. Before that, miners’ inventory declined sharply as steel mills were engaging in stocking. The reasons are following factors.
1. Steel mills were engaging in stocking after strong price increase anticipation during the national holiday. However, Hebei region experienced continuous strong rain weather after the national holiday, which caused difficulty for both supplier and buyer to trade, leading steel mills’ inventory kept lowering, therefore the restocking activity by mills increased sharply recently.
2. Due to iron ore market in southern part of China were stable recently, miners didn’t engage in massive production and the resource availability level in the region is a little bit tight, which gave solid support for good transaction after the national holiday.
3. Imported iron ore saw continuous upward trend during the first ten day of October, and finally then stabilize in recent days. At present, 63.5% Indian fines future price is quoted at USD 157 per tonne to USD 159 per tonne, CFR, spot price is offered at CNY 1160 per tonne to CNY 1190 per tonne. The imported iron ore market plays a key role on how domestic iron ore market would performs in the future.